Property Management

[Jilly]

Hey all, as you know, Sully and I are moving. It seems quite dumb to try and sell our house and lose money, so we are thinking about renting it.

Do you or your loved ones have suggestions on a property management company in this area?

How much have you been charged by said companies?

Is it just easier to rent it yourself?

What say you all powerful magic 8 ball called Chiefsplanet?

[MOhillbilly]

do an extensive background check on all potential renters.
Put clauses in the contract thats state if they fuck up, get behind,destroy the place you can evict them on the spot.

Dont have a soft heart. Friends is friends. Business is business.

[DeezNutz]

Magic device says.........try to sell your home.

Renting it could become a nightmare.

[Jilly]

Magic device says.........try to sell your home.

Renting it could become a nightmare.

According to our realtor, we would be losing $10,000....seems a little nightmarish to me also.

[DeezNutz]

According to our realtor, we would be losing $10,000....seems a little nightmarish to me also.

Yeah, I understand. Tough decisions...

Much luck and good wishes for all this to work out for the best, whatever you decide.

[MOhillbilly]

this aint no shit.

my pops was a slum lord,mom was a slum lord, and i dabbled in it for acouple years. Screw that shit.
Something breaks because they tear it up guess whos on the hook?

[alpha_omega]

Magic device says.........try to sell your home.

Renting it could become a nightmare.

I second that....even with the 10K loss.

[Jilly]

that bad, huh? even with a property management company?

[MOhillbilly]

that bad, huh? even with a property management company?

they are gonna want a decent cut and you will still be on the hook for repairs,maint.

[Sofa King]

I second that....even with the 10K loss.

+1...


i've seen too many examples of renters moving in and destroying places... with kids, accidents seem inevitable... not to mention the 1000 other ways things can go wrong...

IMO, renting is not worth the hassle...


i would definantly try to sell the place if you can..

[RJ]

Based on my observations over the years, I would never want to rent out a home unless I were close enough to keep an eye on things and very handy in terms of doing my own maintenance and repairs. As a carpet and flooring guy I see a lot of rental property and some of it ain't pretty.

And if you do it, don't rent to friends/family. You need to be able to give a tenant the heave-ho without guilt getting in your way.

[Cannibal]

they are gonna want a decent cut and you will still be on the hook for repairs,maint.

We're thinking of getting a new house in the future and renting our current home out as well. Isn't there an insurance policy you can get for situations like these?

[RJ]

We're thinking of getting a new house in the future and renting our current home out as well. Isn't there an insurance policy you can get for situations like these?


That sounds fishy. If such a thing exists, I'd bet it doesn't cover much or has one helluva deductible.

[MOhillbilly]

We're thinking of getting a new house in the future and renting our current home out as well. Isn't there an insurance policy you can get for situations like these?

Never heard of it.

[vailpass]

A comprehensive landlord's rental property policy from MetLife Auto & Home® will protect your investment property, so you can rent it out with confidence.
Landlord's rental property insurance provides all the coverage you need to protect your property from damage-and you from legal and personal liability.

MetLife Auto & Home landlord's rental property insurance covers*:

Your rental building
Other private structures, such as a garage or shed
Any personal property, such as tools, appliances, furniture, stored on-site or provided by you for use by your tenants
Landlord’s rental property insurance is available in two forms:

Landlords Rental Dwelling Insurance
This policy covers you if you own a rental building designed for one to four families.

Landlord's Rental Condominium Insurance
If you own a condo and rent it out, this coverage is for you.


http://www.metlife.com/individual/insurance/home-insurance/landlord-insurance.html#basics

[Ralphy Boy]

There are a lot of things to consider and one factor is how far you are going to live from the property. If you're far away a management company is almost a necessity.

The downside on that is that, when its vacant, they are only getting 8-15% of the total, so if your normal rent is $1,000, they lose $80 to $150. You lose a whole months rent.

The other option is a leasing company, who isn't an ongoing manager but rather one that is paid 1/2 the first months rent to show the property to prospective tenants. They take care of screening them and signing them to a lease but the payments are made directly to you. I've used one repeatedly with mixed results. My recommendation would be that you list it with multiple leasing companies and let each know the property is listed with a few agencies. Basically the first one to lease it wins.

[Cannibal]

A comprehensive landlord's rental property policy from MetLife Auto & Home® will protect your investment property, so you can rent it out with confidence.
Landlord's rental property insurance provides all the coverage you need to protect your property from damage-and you from legal and personal liability.

MetLife Auto & Home landlord's rental property insurance covers*:

Your rental building
Other private structures, such as a garage or shed
Any personal property, such as tools, appliances, furniture, stored on-site or provided by you for use by your tenants
Landlord’s rental property insurance is available in two forms:

Landlords Rental Dwelling Insurance
This policy covers you if you own a rental building designed for one to four families.

Landlord's Rental Condominium Insurance
If you own a condo and rent it out, this coverage is for you.


http://www.metlife.com/individual/insurance/home-insurance/landlord-insurance.html#basics

I thought there might be some sort of insurance for this. Thanks for the link!!!

[vailpass]

I thought there might be some sort of insurance for this. Thanks for the link!!!


National News
As Homeowners Unable to Sell Become Landlords, Insurance Needs Change
By J.W. Elphinstone
August 3, 2009

As more homeowners are having trouble selling their homes in today's real estate market, some are thinking about becoming landlords.

A growing number of homeowners who need to relocate for a job or other reason are renting out their homes instead of selling them so they can wait until the market improves. At the same time, investors are taking advantage of low prices to buy rental properties.

Allstate has seen a 27 percent increase in the number of homeowners who switched their insurance policies to landlord policies, compared with year-ago figures. Travelers also said they're seeing a similar increase. So is State Farm Insurance, but less so.

"When you become a landlord, your property goes from a residence to a place of business,'' says Julie Parsons, vice president of consumer household at Allstate.

That requires a landlord insurance policy, which covers the property and the owner's exposure if anyone gets hurt in it.

These policies typically cover the building in case it's damaged or destroyed by fire, lightning, wind, hail, cars or collapse from ice, snow or sleet. they also cover the landlord's personal property used by the tenant or used to maintain the house. This could include appliances and landscaping machinery like snow blowers and lawnmowers.

Landlord policies don't include any protection against flooding or offer compensation for damage to renter property. And depending on the how extensive the coverage is, it might also exclude damage from sewer backup, earthquake, vandalism and theft.

Allstate's average annual premium for a basic landlord policy package is $650, but costs can vary widely depending on the state, the amount of insurance and the deductible. Insurance companies also take into account building costs, neighborhood crime, square footage, as well as features like pools and fireplaces, and credit history.

To get a discounted price, some insurers offer an umbrella policy that combines other insurance, like car and homeowner's insurance, with the landlord policy.

More important, the coverage helps protect landlords from liability if someone gets hurt on their property. Some policies also pay for some or all of legal expenses. It also will pay for some or all the medical expenses for people injured on the property if the landlord is found responsible.

Unlike a homeowner's policy, the landlord policy also will compensate for lost rent if the building is uninhabitable because of damage that is covered by the insurance. This is a big deal for a landlord who relies solely on that income, especially if a building is under repairs for a long time.

"What if you need to rebuild the building? What about that income?'' says Ed Charlebois, vice president of personal lines at Travelers.

Landlords can add on other options, for a price, to either increase how much money an insurance company will pay out or to expand coverage to certain events.

For example, a landlord may want protection from burglary or vandalism. Or, he may want to insure against building code violations and fire department charges. Some companies allow landlords to insure specific property like satellite dishes.

Like homeowner's insurance, landlord policies don't include any protection against flooding. That coverage is available through the National Flood Insurance Program. It includes building coverage with personal property coverage as an option.

While flood coverage can be expensive in high flood zones, it could help offset a huge hit if a property is flooded. The average flood claim totaled more than $33,000 over the past 10 years, according to the government, and just a few inches of water can cause damage costing thousands of dollars. And most mortgage lenders require flood protection in a high flood zone.

Renters also can get their own flood insurance from the National Flood Insurance Program to protect their personal belongings. Landlords may want to recommend that tenants buy that and their own renter's insurance since landlord policies don't cover a renter's property. Some of the large national apartment owners require their tenants to buy renter's insurance.

To head off any disputes with an insurance company if as there is a claim, landlords are advised to have dated photos of the property, both inside and out, to show its condition before any damage.

Also, they should make the property safer by regularly inspecting it for any hazards like cracked or uneven sidewalks, broken handrails and burned out light bulbs, State Farm recommends. Out-of-town landlords may want to hire a property manager to deal with these problems promptly.

http://www.insurancejournal.com/news/national/2009/08/03/102711.htm?print=1

___

On the Net:

www.floodsmart.gov

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[Jilly]

what's the difference between that and homeowner's insurance?

[Hog's Gone Fishin]

As a rental property owner I will tell you this. I now have 20 rentals. When I started buying rentals its was difficult ,money wise to keep up. Just say you clear $50 a month over your taxes,insurance and mortgage. If a hot water heater goes out theres $500. If you have 20 rentals clearing $50 a month , no problem. If you have 1, big problem.

Next, a rental management company certainly takes the headache out ,BUT, they normally charge 10 % of the rent AND every single time the tenant needs a light bulb changed they will send somebody in to do it and charge a maintenance fee. I have a house on the East coast being managed and it is a money pit.

My feeling is , you need to either be in it or not, don't dabble. If you only have one property and it gets destroyed it's a big deal. If its a business and a house gets destroyed it's part of the business.

[HemiEd]

this aint no shit.

my pops was a slum lord,mom was a slum lord, and i dabbled in it for acouple years. Screw that shit.
Something breaks because they tear it up guess whos on the hook?

When we relocated up here, we rented our house out the first couple years to what we thought were casual friends.

Holy shit, it is the worst thing we could have done, even though our choices were limited. They were pigs, and destroyed the place. My 24x24 heated garage was used to store their trash, since they didn't want to pay to have it hauled off. It was packed with garbage bags full of garbage, some of it over a year old. It was horrid.

We found a dead cat above the drop ceiling in the basement.

My boss has about 2 dozen rentals, every once in a while she lets me see on of the units after someone moves or abandons the rental.

It isn't for me, no thanks.

[Sully]

Wow...
...That fucking sucks.
The problem is this...
We have no way to come up with $10,000 if we do sell the place.

[Cannibal]

When we relocated up here, we rented our house out the first couple years to what we thought were casual friends.

Holy shit, it is the worst thing we could have done, even though our choices were limited. They were pigs, and destroyed the place. My 24x24 heated garage was used to store their trash, since they didn't want to pay to have it hauled off. It was packed with garbage bags full of garbage, some of it over a year old. It was horrid.

We found a dead cat above the drop ceiling in the basement.

My boss has about 2 dozen rentals, every once in a while she lets me see on of the units after someone moves or abandons the rental.

It isn't for me, no thanks.

I guess most people really are just classless scum in this day and age. I really will have to think about whether we're going to do this or not. BTW, your post makes me wish physical harm on the people you rented to.

[Hog's Gone Fishin]

Wow...
...That ****ing sucks.
The problem is this...
We have no way to come up with $10,000 if we do sell the place.


Can't you rent out Jilly instead of the house ?

[MOhillbilly]

As a rental property owner I will tell you this. I now have 20 rentals. When I started buying rentals its was difficult ,money wise to keep up. Just say you clear $50 a month over your taxes,insurance and mortgage. If a hot water heater goes out theres $500. If you have 20 rentals clearing $50 a month , no problem. If you have 1, big problem.

Next, a rental management company certainly takes the headache out ,BUT, they normally charge 10 % of the rent AND every single time the tenant needs a light bulb changed they will send somebody in to do it and charge a maintenance fee. I have a house on the East coast being managed and it is a money pit.

My feeling is , you need to either be in it or not, don't dabble. If you only have one property and it gets destroyed it's a big deal. If its a business and a house gets destroyed it's part of the business.

my mom worked for some people who were friends of hers that had 100+ properties in spfld. my dad had a half dozen and i had two. Hog Farmers advice as to the business aspect of it is sound.

[HemiEd]

I guess most people really are just classless scum in this day and age. I really will have to think about whether we're going to do this or not. BTW, your post makes me wish physical harm on the people you rented to.

Thanks, I appreciate your comments. They were gone, vanished, when I saw the condition of the place.
My wife had to calm me down, and since my time to be down there was very limited, she and my daughter ended up having to do most of the repairs/clean up.
But it became very clear to me, why they were still renting at their age, and just what kind people they really were. I see why good "renters" are so cherished by their landlords.

It is a difficult situation, being "upside down" in a place, one I have never had to deal with thankfully. I have heard many stories about people having to bring money to a closing, not fun. Renting probably is the best option, but you might find the repairs/replacement (always figure on the carpet needing replaced at the very least) to push that figure.

[Cannibal]

Thanks, I appreciate your comments. They were gone, vanished, when I saw the condition of the place.
My wife had to calm me down, and since my time to be down there was very limited, she and my daughter ended up having to do most of the repairs/clean up.
But it became very clear to me, why they were still renting at their age, and just what kind people they really were. I see why good "renters" are so cherished by their landlords.

It is a difficult situation, being "upside down" in a place, one I have never had to deal with thankfully. I have heard many stories about people having to bring money to a closing, not fun. Renting probably is the best option, but you might find the repairs/replacement (always figure on the carpet needing replaced at the very least) to push that figure.

We're not actually upside down on our place. I am just thinking of getting a larger home in the near future and can't decide if I want to use this one as a 2nd form of income. I am currently leaning against it. Too many scumbags.

[vailpass]

When we relocated up here, we rented our house out the first couple years to what we thought were casual friends.

Holy shit, it is the worst thing we could have done, even though our choices were limited. They were pigs, and destroyed the place. My 24x24 heated garage was used to store their trash, since they didn't want to pay to have it hauled off. It was packed with garbage bags full of garbage, some of it over a year old. It was horrid.

We found a dead cat above the drop ceiling in the basement.
My boss has about 2 dozen rentals, every once in a while she lets me see on of the units after someone moves or abandons the rental.

It isn't for me, no thanks.

Damn.

[BigRedChief]

Hey all, as you know, Sully and I are moving. It seems quite dumb to try and sell our house and lose money, so we are thinking about renting it.

Do you or your loved ones have suggestions on a property management company in this area?

How much have you been charged by said companies?

Is it just easier to rent it yourself?

What say you all powerful magic 8 ball called Chiefsplanet?You moving to that place we discussed back at the Mavericks game.

[HemiEd]

We're not actually upside down on our place. I am just thinking of getting a larger home in the near future and can't decide if I want to use this one as a 2nd form of income. I am currently leaning against it. Too many scumbags.

Sorry for the confusion, I was referring to the thread starter being upside down. I have a hard time keeping track of who is connected here, Sully, Jilly, Gonzo? Not sure how I thought you were in the mix. :D

My youngest ended up buying that house at a great discount from us, and she finally has a very good renter herself, since she moved to Texas. I think they are few and far between.

[Jilly]

You moving to that place we discussed back at the Mavericks game.

Not the Arizona place, San Marcos, TX, actually..... seems God just wants me in Texas for some reason!

[Sully]

Sorry for the confusion, I was referring to the thread starter being upside down. I have a hard time keeping track of who is connected here, Sully, Jilly, Gonzo? Not sure how I thought you were in the mix. :D

My youngest ended up buying that house at a great discount from us, and she finally has a very good renter herself, since she moved to Texas. I think they are few and far between.

We aren't really upside down. We are at that odd place where we owe almost exactly what we can get out of the place. Problem is realtor's fees and such...


...and I have no confidence in our ability to sell without a realtor. Hell, I just think about us looking at houses, and we never look at places that aren't listed by a realtor.

[Simply Red]

Magic device says.........try to sell your home.

Renting it could become a nightmare.

cool, where'd you get that thing?

[Phobia]

I'm not a property mgmt company but I'll drive by it now and then and take care of problems for a nominal fee.

[Bump]

renters will fuck your shit up!

[Hog's Gone Fishin]

Not the Arizona place, San Marcos, TX, actually..... seems God just wants me in Texas for some reason!

Texas is wonderful ! You'll never have to worry about losing your right to bear arms and there's no state income taxes. Lots of Mexicans though.

[Simply Red]

Texas is wonderful ! You'll never have to worry about losing your right to bear arms and there's no state income taxes. Lots of Mexicans though.

that's hidden racism.

[Deberg_1990]

Texas is wonderful ! You'll never have to worry about losing your right to bear arms and there's no state income taxes. Lots of Mexicans though.

Well theres lots of whites in Missouri...so its a trade off.

[Groves]

There are 101 ways for this to end up with you dreaming of paying only $10,000 to get out and be done with it.

If you can't come up with the 10large now, what will you do then?

[Deberg_1990]

I guess most people really are just classless scum in this day and age

This.....sucks but true....

People just dont give a sh*t if they DONT OWN THE PROPERTY.

[Phobia]

This.....sucks but true....

People just dont give a sh*t if they DONT OWN THE PROPERTY.

Or if they do own the property. Most people have no earthly idea how to properly maintain their home or they've stretched themselves so thin financially they can't possibly afford to maintain it.

[vailpass]

This.....sucks but true....

People just dont give a sh*t if they DONT OWN THE PROPERTY.

Oh yes. What's the number one comment people make when driving a car from Hertz or Avis?

[Deberg_1990]

Or if they do own the property. Most people have no earthly idea how to properly maintain their home or they've stretched themselves so thin financially they can't possibly afford to maintain it.

and thats where Edgewood Construction steps in! :)

[HemiEd]

We aren't really upside down. We are at that odd place where we owe almost exactly what we can get out of the place. Problem is realtor's fees and such...


...and I have no confidence in our ability to sell without a realtor. Hell, I just think about us looking at houses, and we never look at places that aren't listed by a realtor.


That isn't so bad then. I agree on the realtor issue, maybe you could negotiate a discounted rate?

[Saul Good]

If you didn't own the house already, would you move to Texas and buy this house in KC as a rental? Of course you wouldn't. Sell the house.

As an aside, if you don't have the $10,000 to pay to get out from under your current house, you really shouldn't even consider buying in Texas. Rent something cheap until you have your finances under control.

[KC Jones]

If you didn't own the house already, would you move to Texas and buy this house in KC as a rental? Of course you wouldn't. Sell the house.

As an aside, if you don't have the $10,000 to pay to get out from under your current house, you really shouldn't even consider buying in Texas. Rent something cheap until you have your finances under control.

game, point, and match

[Sully]

If you didn't own the house already, would you move to Texas and buy this house in KC as a rental? Of course you wouldn't. Sell the house.

As an aside, if you don't have the $10,000 to pay to get out from under your current house, you really shouldn't even consider buying in Texas. Rent something cheap until you have your finances under control.

Yeah.
We've already decided we are going the rental route in Texas, so that's a given.
As for Phil's comment, I definitely fall into the "don't know how to properly maintain property" group. I just never learned a lot of those things. Look no further than my recent plumbing issues.

It's a shitty situation, no doubt. It's very overwhelming. But we'll figure something out. I just wish there was an easy answer. Just throw some prayers our way if you are so inclined.

[Bugeater]

If you don't mind me asking, how in the sam hell are you losing 10K on the house? I'm just curious because every time the subject of renting vs buying comes up here, there is an onslaught of people saying how retarded it is to rent and not to buy. Maybe you need to find some of those people and have them advise you.

[luv]

When are you moving? Best of luck. No advice on what to do with the housing situation, but I'll sen some good thoughts your way.

[MahiMike]

I'm a R/E investor. I would definitely rent if you're up for it. One tip - offer owner financing instead of renting. There are tons of folks out there that would love to own but the banks have gotten stingy. You can charge up to 20% more than good credit folks. Also, by playing the bank, you can collect interest! So even if they somehow finance you out some day, it's amortized (meaning they've paid barely anything down towards the loan). Anyone who's comfortable with other people living in their homes should go this route for the next few years. pm me if you like.

[DeezNutz]

If you don't mind me asking, how in the sam hell are you losing 10K on the house? I'm just curious because every time the subject of renting vs buying comes up here, there is an onslaught of people saying how retarded it is to rent and not to buy. Maybe you need to find some of those people and have them advise you.

Lots of people who just bought fall into the same category.

Purchased on the bubble. Pop. Market = shit, so limited appreciation. And kick in at least 5% commission and you have - 10K.

[Sully]

I'm a R/E investor. I would definitely rent if you're up for it. One tip - offer owner financing instead of renting. There are tons of folks out there that would love to own but the banks have gotten stingy. You can charge up to 20% more than good credit folks. Also, by playing the bank, you can collect interest! So even if they somehow finance you out some day, it's amortized (meaning they've paid barely anything down towards the loan). Anyone who's comfortable with other people living in their homes should go this route for the next few years. pm me if you like.

I'd love to know the details on this. PM me when you get a chance. Take into account I have no idea what your post means. But I'm interested.

[Saul Good]

I'd love to know the details on this. PM me when you get a chance. Take into account I have no idea what your post means. But I'm interested.

If warning buzzers and sirens aren't going off in your head screaming "DANGER", they should be.

broke people + sophisticated real estate deal + long-distance landlording + no experience as a landlord + no understanding of said sophisticated real estate deal = bankrupcy

Honestly, what part of this equation is appealing? I don't mean to be insulting, so forgive me for being blunt, but someone needs to smack you before you get in WAY over your heads. Don't turn a $10,000 problem into a debacle that haunts you for the next 10-20 years. I'm sure Mahi is a smart guy and understands what he is doing, but this is bad news for a couple in your situation. Take your lumps and move on.

[jAZ]

Get a good property manager who has high standards and doesn't put up with any crap. Then you should end up with high caliber renters. If you do, then enjoy the fact that you are buying a home with an interest free loan (assuming the rent at least covers the the cost of interest on your mortgage, if not the whole payment).

[Bugeater]

Lots of people who just bought fall into the same category.

Purchased on the bubble. Pop. Market = shit, so limited appreciation. And kick in at least 5% commission and you have - 10K.
Ohhhh....so all those people who are always screaming BUY BUY BUY don't necessarily know what they're talking about?

[Saul Good]

Ohhhh....so all those people who are always screaming BUY BUY BUY don't necessarily know what they're talking about?

Imagine that...

[MahiMike]

Get a good property manager who has high standards and doesn't put up with any crap. Then you should end up with high caliber renters. If you do, then enjoy the fact that you are buying a home with an interest free loan (assuming the rent at least covers the the cost of interest on your mortgage, if not the whole payment).

Also good advice. If you don't want the headaches and don't really care to hassle with it, pay one 10% and be done with it. I wouldn't give them more than 6 weeks to rent it though. Actually, they should have about 5 prospects for you to choose from by the time u move out.

[kc rush]

I'll take a closer look at this thread and pm our property managers info later.

[MahiMike]

Something else to consider. The $10K loss - is that before or after you factor in closing costs, advertising, holding time? I'm gonna guess it'll end up closer to $20K in this market. How many homes have sold on your street in the last 6 mos? Do the legwork yourself to find out. I'm sure the county u live in has comps. Or use Zillow.com to see. Go to some open houses in your n'hood to see how your home compares. Honestly, I would never sell right now even if I was breaking even. In 5 yrs you'll kick yourself.

[2bikemike]

I have several rental properties. I kind of scanned through the posts and a lot of people offered good advice. If you have an attachment to the home it could be a bit difficult to offer it up to renters who may or may not care enough to take care of it.

You should definately do a good cost analysis of what you can reasonably expect to get for your rental. Compare it to the costs of ownership (PITI) and throw in around 10% of your rental income into repair costs. I have several property managers since I have my properties scattered about. I am charged as low as 8% and as high as 10% of monthly income for management fees.

I have a Kansas landlord policy for my four-plex in the KC area. I happened to have a fire that took out 2 units for a period of time. My insurance covered complete replacement costs and allowed to update to current code. It also covered Loss Rents for the time it took to repair the property.

It really comes down to how comfortable you are with going the rental route. I would highly recommend that you have a nice little nest egg that would cover all your costs (PITI) + repairs and making the place nice to live in, should you lose a tenant. I personally would not rent my house without having at least a years worth of PITI available for a single family residence.

I have had good tenants and I have had bad tenants. My best tenant was a Marine who left the house in such pristine condition that all we had to do was install another tenant. He took care of all the little maint. items himself. My worst was a lady in KC who played the game to the bitter end she finally moved out the day before the sheriff was going to have to force her out. BTW it took 3 months for the eviction to work its way through the courts. All in all I lost about 4 or 5 months worth of rent just trying to get her out and it took 6 months to re rent the apt. Luckily for us we had 3 other tenants paying rent and that covered all our costs but it sure knocked the hell out of our cash flow.

[Sully]

Something else to consider. The $10K loss - is that before or after you factor in closing costs, advertising, holding time? I'm gonna guess it'll end up closer to $20K in this market. How many homes have sold on your street in the last 6 mos? Do the legwork yourself to find out. I'm sure the county u live in has comps. Or use Zillow.com to see. Go to some open houses in your n'hood to see how your home compares. Honestly, I would never sell right now even if I was breaking even. In 5 yrs you'll kick yourself.

That's what our real estate agent estimated after closing. $8000+ of that is her estimated commission.

[Sully]

If warning buzzers and sirens aren't going off in your head screaming "DANGER", they should be.

broke people + sophisticated real estate deal + long-distance landlording + no experience as a landlord + no understanding of said sophisticated real estate deal = bankrupcy

Honestly, what part of this equation is appealing? I don't mean to be insulting, so forgive me for being blunt, but someone needs to smack you before you get in WAY over your heads. Don't turn a $10,000 problem into a debacle that haunts you for the next 10-20 years. I'm sure Mahi is a smart guy and understands what he is doing, but this is bad news for a couple in your situation. Take your lumps and move on.

I appreciate that you are coming from a place of trying to help. Thanks.
I just want to know all my options, which seem very limited.

[DeezNutz]

That's what our real estate agent estimated after closing. $8000+ of that is her estimated commission.

What's the overall percentage being assessed?

[KC Jones]

That's what our real estate agent estimated after closing. $8000+ of that is her estimated commission.

Maybe talk to your lender about a short sale on the property. Since they should be able to recoup all of the loan amount it's probably worth their time and you walk away without losing $10k. Seems like the best option to me.

[Sully]

Maybe talk to your lender about a short sale on the property. Since they should be able to recoup all of the loan amount it's probably worth their time and you walk away without losing $10k. Seems like the best option to me.

Someone mentioned this to me, but couldn't really explain to me what it was. What is it and what's the process?

[Phobia]

Someone mentioned this to me, but couldn't really explain to me what it was. What is it and what's the process?

Well,... it starts a little something like this:
1. "Maybe talk to your lender"

Do you understand that part?

[alnorth]

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http://www.metlife.com/individual/insurance/home-insurance/landlord-insurance.html#basics

*puts on insurance guy hat* Figured I'd comment on this even though it was on page 1.

There's nothing special about this policy. It is a standard "Dwelling Fire" policy designed for rentals, and just about every home insurance company under the sun provides one, though some may offer slightly better coverage or rates than others.

There's nothing wrong with it, and you need one if your renting out a house, but we're talking about a casualty policy here. House burns up, roof gets banged up in a hailstorm, sewer backed up and you bought sewer backup coverage, that sort of thing. The only tenant-related covered loss (other than the idiot accidentally burning the home down) might be if he stole all your sh** out of the home before leaving, maybe.

This isn't a magical "oh cool, this insurance will take care of every bad tenant problem I might run into!" policy, if your tenant moves out and leaves behind a trashed apartment which needs a lot of maintenance, that is generally not a casualty loss, and you'll probably need to pay for it.

[Sully]

Well,... it starts a little something like this:
1. "Maybe talk to your lender"

Do you understand that part?

I understand there's no reason to be a prick.

[Sully]

Maybe talk to your lender about a short sale on the property. Since they should be able to recoup all of the loan amount it's probably worth their time and you walk away without losing $10k. Seems like the best option to me.

I did a little online "research" (who knows what to believe) and it seemed the only issue is that I don't think we are technically upside-down, and aren't behind on our payments.

[2bikemike]

I did a little online "research" (who knows what to believe) and it seemed the only issue is that I don't think we are technically upside-down, and aren't behind on our payments.

If you did a short sale you will have to pay taxes on the difference of what is owed and what you get for the house.

But it sounds like your not really upside down enough to go the short sale route anyway.

I purchased a short sale last summer. I put in the offer in March and the bank finally got around to closing the deal in October. We did not hear anything from the bank for months after our offer went in. Then in mid to late Sept. they finally got around to making the transaction happen. It became a frenetic rush to get everything done by early October or they were going to go ahead and foreclose on the property. It was a real pain in the ass process.

[Jilly]

Here's the deal:

Houses in our area are selling for $140,000 and that's with 200+days on the market. For those months our house would be on the market, we would be making the mortgage payment and when it finally sold, given how much of a payment goes to the actual equity and to interest, we would most likely still, after that many days on the market and after the sale, give $10,000 to selling the house without profit. Logically speaking, it makes more sense to me to wait to sell, put the house on the market when the housing situation is a bit better, and at least break even on the payments. We do not plan to buy another house, would like to, but are not planning on it in Texas for at least a year or until something happens with our house here. Perhaps I'm not seeing the entire picture, perhaps I need to talk to the realtor about her fees, and perhaps, I need to talk to the lender and knowing me, I will do all of the above. Given she doesn't lower her fees, the lender says no to a quick sale, it just seems the more logical solution is to rent it. OR, we can take the $10,000 loss and be done.

We bought the house at the beginning of the pop of the housing bubble, and it was about 3 years ago. It's not that we can't afford it, it's that we are moving to better opportunities for us and this is just a bump in the road. I, above all things, would appreciate prayers and offers of help and good advice. It's an exciting time for us, this is just an obstacle we are trying to figure out and come out happy in the end.

Thanks to those who have really helped! We really appreciate it and I LOVE CP because I knew throwing the question out there would really give us some insight.

[DeezNutz]

Jilly, if I may ask, what is the total percentage going to the realtors? If she's asking for 7%, look elsewhere. You should be able to get a qualified, motivated individual for 5% (2.5%/2.5%).

[Jilly]

Jilly, if I may ask, what is the total percentage going to the realtors? If she's asking for 7%, look elsewhere. You should be able to get a qualified, motivated individual for 5% (2.5%/2.5%).

I believe it is 6%, but I am not positive as I do not have the financial breakdown in front of me. It is possible that we could do for sale by owner, but given my own preference when buying a house, I rarely even look at houses that are for sale by owner.

[Jilly]

Jilly, if I may ask, what is the total percentage going to the realtors? If she's asking for 7%, look elsewhere. You should be able to get a qualified, motivated individual for 5% (2.5%/2.5%).

I have emailed her this morning and questioned her on rates. I've worked with her twice before and we have a fairly good relationship, but I would think that realtors in this market would do all they could just to get minimal commission.

[DeezNutz]

I have emailed her this morning and questioned her on rates. I've worked with her twice before and we have a fairly good relationship, but I would think that realtors in this market would do all they could just to get minimal commission.

Exactly.

Typically, realtors will ask for 6-7%, but, like I said, you should be able to get someone, whom you'll be happy with, for 5%. Even with a 1% difference, that's $1400.

[Sully]

According to her packet, where she estimated out the cost, she's asking 6%.

If we didn't have to pay her, we'd break even.

[DeezNutz]

According to her packet, where she estimated out the cost, she's asking 6%.

If we didn't have to pay her, we'd break even.

Find someone for 5% and save $1400.

Ideally, you want to pay 2%/3% (listing/selling agent), since some agents won't show a property to their buyers unless the commission is 3%. Yes, it's a joke, but it happens.

[The Franchise]

Just a thought here.....

Don't both of your families live in the area? If you trust your parents enough......then have them rent out the house and take care of the repairs (if they're able).

[DeezNutz]

Just a thought here.....

Don't both of your families live in the area? If you trust your parents enough......then have them rent out the house and take care of the repairs (if they're able).

LMAO. That sounds like a wonderful offer, son, and I love you.........But go fuck yourself. /Dad

[Jilly]

Just a thought here.....

Don't both of your families live in the area? If you trust your parents enough......then have them rent out the house and take care of the repairs (if they're able).

I kinda feel like that's asking a little much, but we could possibly hire a company to do the searching, lease, etc....and then just have my parents take care of maintenance issues. It's an option anyways.

[Dayze]

I would just try to sell it FSBO;

at least initially; if it doesn't move, then go to a Realtor. nothing magical about what a realtor does; the title company completes all the other 100 documents that are needed. I think realtors are completely FOS 95% of the time.
Personally, I"m not sure why realtors are still used as buyers agents.

I'm going to scout FSBO when we're ready for our next house.

[Amnorix]

If warning buzzers and sirens aren't going off in your head screaming "DANGER", they should be.

broke people + sophisticated real estate deal + long-distance landlording + no experience as a landlord + no understanding of said sophisticated real estate deal = bankrupcy

Honestly, what part of this equation is appealing? I don't mean to be insulting, so forgive me for being blunt, but someone needs to smack you before you get in WAY over your heads. Don't turn a $10,000 problem into a debacle that haunts you for the next 10-20 years. I'm sure Mahi is a smart guy and understands what he is doing, but this is bad news for a couple in your situation. Take your lumps and move on.

This. This x100. This x 10,000

[Amnorix]

I did a little online "research" (who knows what to believe) and it seemed the only issue is that I don't think we are technically upside-down, and aren't behind on our payments.

Forget a short sale then. Bank won't take a loss when you're current on your payments.

[Amnorix]

So I've read through the thread and I regret to say that I don't see too many great options. Random thoughts:

1. Might want to consider if/how you can just toss the keys to the lender and walk away. I'm not a credit/finance guy, so I'm not exactly sure what the effect is -- others here might be able to talk about it -- but there's no doubt it will screw up your credit rating for a while. If you were clearly upside down on the loan by a significant amount, then this approach would likely be a no-brainer. As it is, however, it's a close call. Might still be a possibility.

2. Renting comes with a hornets nest of potential problems. The first question is what is a reasonable rental rate, and how would that compare to your costs assuming you continue your current mortgage etc., and need to hire a management company? Generally, being a landlord sounds alot more attractive than it really is. You've seen the horrors that others have posted about. Unfortunately, it's more common than anyone realizes.

3. If you're going to sell, you definitely should be able to negotiate down the 6% commission your broker is requesting. I'll defer to local experts out there, but around here 5% is standard, and you can negotiate down to 4% often times.

4. Agree with the prior post that you should definitely rent, wherever it is you're moving to. Until your own economic house is well in order, it's not a good idea to buy a house, because they can be money pits.

[Hog's Gone Fishin]

I would just try to sell it FSBO;

at least initially; if it doesn't move, then go to a Realtor. nothing magical about what a realtor does; the title company completes all the other 100 documents that are needed. I think realtors are completely FOS 95% of the time.
Personally, I"m not sure why realtors are still used as buyers agents.

I'm going to scout FSBO when we're ready for our next house.


Definitely This. When someone says they want to buy the house all you have to do is send them to the bank and the bank will take care of EVERYTHING. I bought most of my houses FSBO. It's not a big deal. Will save you the $8000

Another thought would be to offer the house on a "Lease to Own". This would get you a down payment of 5-10% of the purchase price and the renters will normally take better care of the property. They are also responsible for ALL repairs.

[Bugeater]

I would just try to sell it FSBO;

at least initially; if it doesn't move, then go to a Realtor. nothing magical about what a realtor does; the title company completes all the other 100 documents that are needed. I think realtors are completely FOS 95% of the time.
Personally, I"m not sure why realtors are still used as buyers agents.

I'm going to scout FSBO when we're ready for our next house.
IMO the seller's agent is the biggest waste of money, many of them just place it into the MLS and don't do a damn thing else for you. The buyer's agent will at least scour the area for homes for you and drive you around to look at them, although in the internet age it's questionable if they're even necessary either.

[Deberg_1990]

IMO the seller's agent is the biggest waste of money, many of them just place it into the MLS and don't do a damn thing else for you. The buyer's agent will at least scour the area for homes for you and drive you around to look at them, although in the internet age it's questionable if they're even necessary either.

Yea, i wish society could break the realtor "paradigm" Biggest waste of $$$ ever.

Unfortunately, i think buyers think of a name reality company as some sort of stamp of approval.

[Saulbadguy]

Burn the motherfucker down.

[vailpass]

Burn the mother****er down.

80-something posts before this comes up? Off-season burst loss.

[ralittleus]

I've had good luck in the KC market with multiple properties. The management company below is who I use. She charges first month rent to get it rented and then 10% monthly fee. Her husband does all of the repairs and has been very fair.

Laura H. Simmons, MBA
MoKan Property Management, LLC

affiliated with Chartwell Realty

816-516-7800 • Fax 816-877-8045

[Dayze]

IMO the seller's agent is the biggest waste of money, many of them just place it into the MLS and don't do a damn thing else for you. The buyer's agent will at least scour the area for homes for you and drive you around to look at them, although in the internet age it's questionable if they're even necessary either.

yeah, I mis-spoke on that one. I meant seller's agent. for the exact reason you stated above.
and I agree - with the internet age/MLS etc, the buyer's agent is on it's way down the path of a 'travel agent' circa 1980.

[Dayze]

Definitely This. When someone says they want to buy the house all you have to do is send them to the bank and the bank will take care of EVERYTHING. I bought most of my houses FSBO. It's not a big deal. Will save you the $8000

Another thought would be to offer the house on a "Lease to Own". This would get you a down payment of 5-10% of the purchase price and the renters will normally take better care of the property. They are also responsible for ALL repairs.

exactly.
To think that virtually all properties listed with a real-estate company are inflated in price simply to cover the 'fees' of the realtor.
maybe back in the day the seller's agents etc would earn their money, but not these days.

[vailpass]

exactly.
To think that virtually all properties listed with a real-estate company are inflated in price simply to cover the 'fees' of the realtor.
maybe back in the day the seller's agents etc would earn their money, but not these days.

I haven't used a realtor in 20 years but I use an attorney every time.

[Jilly]

So, she'll graciously lower her fee to 5.5%.....

talked to the lender today...they'll send us a package about short sales in 3-5 days

and have narrowed it down to 2 companies as far as property management....it's amazing what spelling errors, etc will do to a company's reputation. Maybe I'm a snob, but I really feel like if you can't spell something you work with on a daily basis right, then perhaps you aren't the company for me.

[DeezNutz]

So, she'll graciously lower her fee to 5.5%.....

talked to the lender today...they'll send us a package about short sales in 3-5 days

and have narrowed it down to 2 companies as far as property management....it's amazing what spelling errors, etc will do to a company's reputation. Maybe I'm a snob, but I really feel like if you can't spell something you work with on a daily basis right, then perhaps you aren't the company for me.

You know...in the the "CP work thread" or whatever the heck it is, doomy3 lists himself as an agent. Might be worth shooting him a PM. Because **** her and her .5%, that's why.

What's the breakdown? 2.5/3 (listing/buying)?

[Bowser]

You know...in the the "CP work thread" or whatever the heck it is, doomy3 lists himself as an agent. Might be worth shooting him a PM. Because **** her and her .5%, that's why.

What's the breakdown? 2.5/3 (listing/buying)?

LMAO

Capitalism at its finest!

[Jilly]

You know...in the the "CP work thread" or whatever the heck it is, doomy3 lists himself as an agent. Might be worth shooting him a PM. Because **** her and her .5%, that's why.

What's the breakdown? 2.5/3 (listing/buying)?


I don't know. I don't have that with me. I'm just proud of myself for doing all this legwork in 3 days...now to wait 3-5 days for my package.

BOWSER....got any way to make that happen faster?

[DeezNutz]

I don't know. I don't have that with me. I'm just proud of myself for doing all this legwork in 3 days...now to wait 3-5 days for my package.

BOWSER....got any way to make that happen faster?

Three days to get a package? Fuck. Badgirl's lawn boy is available now.

[Jilly]

Three days to get a package? ****. Badgirl's lawn boy is available now.

oh, I should call him. Seems like he's pretty cheap. Ba ba bum.

[Stewie]

Jilly, you have no leverage with your agent now. Wait until she brings you a solid offer and then negotiate her commission.

[Jilly]

Jilly, you have no leverage with your agent now. Wait until she brings you a solid offer and then negotiate her commission.

Yeah, well, found out we are $4000 upside down, not just short her reality fees.

[DeezNutz]

Jilly, you have no leverage with your agent now. Wait until she brings you a solid offer and then negotiate her commission.

?

Yeah, she does because the individual is "her agent." As in, this person is easily replaceable. Easily.

[Stewie]

Yeah, well, found out we are $4000 upside down, not just short her reality fees.

I don't know the market in your area, but her fee is a percentage. If you demand she drops from 5.5 to 4 (not uncommon) that's $2100 of the $4000. If she drops to 3 that's $3500.

[Jilly]

I don't know the market in your area, but her fee is a percentage. If you demand she drops from 5.5 to 4 (not uncommon) that's $2100 of the $4000. If she drops to 3 that's $3500.

I know this sounds bad, but most of you know me and know that I'm not a hardliner. I've worked with her, I knwo her children, she knows mine, I'm not gonna play hardball with her. And the $4000 is on top of the $10000....so we're talking upwards $15000 dollars.

[Stewie]

?

Yeah, she does because the individual is "her agent." As in, this person is easily replaceable. Easily.

The leverage happens when an offer is on the table. It doesn't matter who the agent is.

Agent: We have a solid offer of $135K
Jilly: That puts me under water.
Agent: But it's a really solid offer!
Jilly: OK, I'll accept the offer if you lower your commission to 4%.
Agent: OK, that's fair.

The agent gets a commission right now or months down the line. Money right now fixes alot of things.

[Stewie]

I know this sounds bad, but most of you know me and know that I'm not a hardliner. I've worked with her, I knwo her children, she knows mine, I'm not gonna play hardball with her. And the $4000 is on top of the $10000....so we're talking upwards $15000 dollars.

This is business. She's playing hardball with you for sure.

[DeezNutz]

I know this sounds bad, but most of you know me and know that I'm not a hardliner. I've worked with her, I knwo her children, she knows mine, I'm not gonna play hardball with her. And the $4000 is on top of the $10000....so we're talking upwards $15000 dollars.

No offense, but this is exactly why you should probably avoid doing business with this person.

[Jilly]

No offense, but this is exactly why you should probably avoid doing business with this person.

yep...saw it coming. No offense, guys. But, "I'm sensitive and I'd like to stay that way."

[Jilly]

I do love CP though and thanks for all the extra help and advice. Doubt I'd go here for a pastoral counseling session, but on the good practical stuff, you all are way helpful!

[Stewie]

yep...saw it coming. No offense, guys. But, "I'm sensitive and I'd like to stay that way."

I understand, but it's apparent she's not. She'll gladly spend the $6000 you give her.

[Over-Head]

If ya do rent it, make sure you get the guy to sign a claus whereby 10% off the top gets donated every sunday if he starts an "herb" garden in the basement :Thumb:

[Bugeater]

I know this sounds bad, but most of you know me and know that I'm not a hardliner. I've worked with her, I knwo her children, she knows mine, I'm not gonna play hardball with her. And the $4000 is on top of the $10000....so we're talking upwards $15000 dollars.
And that's IF you get your asking price, right? Chances are you're going to get beat down on the price, and after that the buyer will hire a home inspector who will find every single flaw in the place (or even make some up), and then the buyer will expect you to fix all that even though you're not getting your asking price for the home.

So in reality, it's likely to be even worse.