Leasing a House thread

[San Juan Sun]

So I'm probably not going to be able to sell my house in Michigan, so we put it up for lease. We've got two offers, one of which is a pretty good one but has a lot of demands. For example, they have a 60 lb dog. Also, they want to paint my garage (I've already go a painter lined up aside from them). And they want to do a bunch of landscaping.

Anyone have any general thoughts on what to watch out for when leasing out a home?

[Jacob]

So I'm probably not going to be able to sell my house in Michigan, so we put it up for lease. We've got two offers, one of which is a pretty good one but has a lot of demands. For example, they have a 60 lb dog. Also, they want to paint my garage (I've already go a painter lined up aside from them). And they want to do a bunch of landscaping.

Anyone have any general thoughts on what to watch out for when leasing out a home?

1. Credit report
2. references
3. large deposit

If they pass those 3 tests and they also are offering to improve your property, sounds like it might be a good deal. But with the dog, you will have to replace the carpets, so price that in.

[San Juan Sun]

1. Credit report
2. references
3. large deposit

If they pass those 3 tests and they also are offering to improve your property, sounds like it might be a good deal. But with the dog, you will have to replace the carpets, so price that in.

Credit is 600 for the guy (recently divorced) and 700+ for the lady.
Haven't seen references yet.
Deposit will be decent.

The home is mostly hardwood floors, but the dog may tear up the yard. But if they want to work on the yard, then maybe it's OK. The home is in a very nice area, and there are a lot of people with good income but crappy credit looking to rent here.

[Eddie]

My bro leased a house. The guy quit making rent - and then 2-3 months later just up and left the place with no forwarding information.

His kids had played darts with the walls in their room. The yard was a mess. He left piles of junk there for my brother to clean up. His cat and dog pissed on everything - so they had to pull out all of the carpet and padding. They did the same down some of the vents and on the furnace filter - the place stunk to high heaven.

Most of this is stuff that doesn't happen overnight. I mean, you'll see if they are keeping the yard up or not. And you don't have to inspect the whole home to see how rough or clean they are generally.

So I guess my only advice would be that if you are moving far enough away that you won't be able to check in on the place from time to time yourself, then it might be worth arranging for a friend to do so - or maybe even a property management company.

I suppose in theory getting references from previous rental owners could help weed out the losers. But you never know.

[wuapinmon]

I'm going to guess we'll get "Leaving a House" or "Leasing a Horse" as pun threads.

[bluegoose]

I was recently speaking with a gal that owns a property management company. I was asking her what kind of a credit score she typically requires for some of her rentals. I was expecting to hear something in the 500-600 range.

She said that she has all but stopped checking in recent years. Nearly every application that she was getting would come back with a score in the 200-300 range, regardless of which type of house she was trying to rent. She typically went more on employment and rental history, as well as references.

[bluegoose]

I'm going to guess we'll get "Leaving a House" or "Leasing a Horse" as pun threads.

I am pretty neurotic about locking doors and closing garage doors when i leave the house or the office. It seems that several times per month I end up circling back through the neighborhood just to make sure that I actually did close the garage door on my way out.

I have yet to find the garage door still open, but it still bothers me that it may happen sometime.

I've yet to lease a horse, so i don't know anything about how that works. I'll be following that thread closely.

[Jacob]

I was recently speaking with a gal that owns a property management company. I was asking her what kind of a credit score she typically requires for some of her rentals. I was expecting to hear something in the 500-600 range.

She said that she has all but stopped checking in recent years. Nearly every application that she was getting would come back with a score in the 200-300 range, regardless of which type of house she was trying to rent. She typically went more on employment and rental history, as well as references.

I'm going to have to call BS on this, especially since credit scores in the 200-300 range don't exist. The scale starts at 350, and you'll not often find one that low. And if you are renting to anyone anywhere near that range, you are going to get burned. It's hard enough to manage a rental property long distance without having to worry about the tenants skipping out every couple of months. A low credit score indicates that they don''t pay their bills and even when they do, they don't pay them on time.

[wuapinmon]

Before my mom moved into her rental, I managed it for her. Some pointers about renters in a house.

1. Stuff breaks even if you live there. My mom has this attitude that nothing ever goes wrong in her house, and she was always pissed at the renters when something broke. She was antagonistic towards them, and that doesn't lend itself well to being a good landlord.

2. A yard can quickly get out of control. If they want to do landscaping, does it include a fence for the dog? If so, will it comply with covenants? If so, will it bring down the value of your home (chain link?).

3. Big dogs can shred hardwood floors very quickly. I'd find out how much it costs to resurface the floors in that house. I'd then add 10% for inflation, and I'd make that the special pet deposit in addition to the other deposit and 1st and last months rent. If it's not the kind that can be resurfaced, and you want to keep the floors instead of replacing them, I'd say "no" to having a dog.

4. Find out about eviction law in your state. I'm guessing that it's really really generous to the renter in your state given the politics of the region. Try and find an enforceable contract that protects all of your rights. There are situations that can arise where you can have someone living in your home, but you can't kick them out even if they stop paying rent.

5. Have all of the utilities placed in a landlord status. Do not allow tenants to pay you for the bills. Make them place the utilities in their own names, not yours.

6. Photograph and video the entirety of the house and yard right before they move in. Take good photos of high traffic areas of the house, paying careful attention to the kitchen and bathrooms and all windows (and the garage pad if you have a garage). This will be invaluable if you have to prove damage beyond normal wear and tear.

7. Make sure the stove has a hood or vent. Make sure that the contract stipulates that the tenants will use it whenever they cook. Cleaning kitchen gunk off walls, cabinets, and appliances is awful work (you have to use denatured alcohol) and it builds up very quickly.

8. Recognize that when people move out, "broom clean" does not mean that the place will be spotless. Normal wear and tear is not deductible from security deposits in most states. What constitutes normal wear and tear is debatable, but dirty walls generally does not count.

9. Dogs and cats stink, and we never ever allow them in our rental.

10. Talk to an accountant about tax issues from receiving rental income. It can really complicate your life if you have any other non-wages income.

[old_gregg]

I was recently speaking with a gal that owns a property management company. I was asking her what kind of a credit score she typically requires for some of her rentals. I was expecting to hear something in the 500-600 range.

She said that she has all but stopped checking in recent years. Nearly every application that she was getting would come back with a score in the 200-300 range, regardless of which type of house she was trying to rent. She typically went more on employment and rental history, as well as references.

I'm going to have to call BS on this, especially since credit scores in the 200-300 range don't exist. The scale starts at 350, and you'll not often find one that low. And if you are renting to anyone anywhere near that range, you are going to get burned. It's hard enough to manage a rental property long distance without having to worry about the tenants skipping out every couple of months. A low credit score indicates that they don''t pay their bills and even when they do, they don't pay them on time.

yeah, bluegoose both you and your friend are liars and should be ashamed of yourselves.

[Mormon Red Death]

So I'm probably not going to be able to sell my house in Michigan, so we put it up for lease. We've got two offers, one of which is a pretty good one but has a lot of demands. For example, they have a 60 lb dog. Also, they want to paint my garage (I've already go a painter lined up aside from them). And they want to do a bunch of landscaping.

Anyone have any general thoughts on what to watch out for when leasing out a home?

Try and lease to residents. I have a good friend who found two residents and signed them to a 4year lease. Talk to your hospital. Thedre has to be an in.coming resident(s) who would love your house. Btw there is a guy in my ward who can manage the property for you and he is already doing that for a couple of other lds who had to leave and couldn't sell.

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[Indy Coug]

So I'm probably not going to be able to sell my house in Michigan, so we put it up for lease. We've got two offers, one of which is a pretty good one but has a lot of demands. For example, they have a 60 lb dog. Also, they want to paint my garage (I've already go a painter lined up aside from them). And they want to do a bunch of landscaping.

Anyone have any general thoughts on what to watch out for when leasing out a home?

We have a tenant that is in the middle of a 3 year lease of our previous home. Are you utilizing a property manager? They can help you screen for a better qualified tenant and can help you with contracts, etc.

[bluegoose]

I'm going to have to call BS on this, especially since credit scores in the 200-300 range don't exist. The scale starts at 350, and you'll not often find one that low. And if you are renting to anyone anywhere near that range, you are going to get burned. It's hard enough to manage a rental property long distance without having to worry about the tenants skipping out every couple of months. A low credit score indicates that they don''t pay their bills and even when they do, they don't pay them on time.

Gee, Jacob. You are really smart. I had no idea you were such an expert in real estate, especially in rental property management.

Remind me again how many rental properties that you own and how many property management companies that you are currently or previously involved with?

And your knowledge of the economic conditions in my county is impressive! I had no idea we were so well off that a FICO score of 300 is essentially non-existent here.

I'll have to mention that to the thousands of unemployed people totaling nearly 18% of the eligible workforce here that things are actually pretty good.

And to those hundreds and thousands of families EACH MONTH that are losing their houses to foreclosure, the future is looking bright. Their credit scores are not nearly as low as they think they are.

[old_gregg]

I'm going to have to call BS on this, especially since credit scores in the 200-300 range don't exist. The scale starts at 350, and you'll not often find one that low. And if you are renting to anyone anywhere near that range, you are going to get burned. It's hard enough to manage a rental property long distance without having to worry about the tenants skipping out every couple of months. A low credit score indicates that they don''t pay their bills and even when they do, they don't pay them on time.

wrong

[Indy Coug]

http://en.wikipedia.org/wiki/Credit_...(United_States)

FICO score range

A FICO score is between 300 and 850, exhibiting a negative skewed distribution with 60% of people falling between approximately 650 and 799.[12] According to FICO the median score in 2006 was 723.[13]

Each individual actually has three credit scores for the FICO scoring model because the three national credit bureaus, Experian, Equifax and TransUnion, each has its own database. Data about an individual consumer can vary from bureau to bureau.