Author Topic: Any advice for a new rental property owner?  (Read 4696 times)

Offline ColdSoul

  • Prepper
  • **
  • Posts: 60
  • Karma: 5
Any advice for a new rental property owner?
« on: May 12, 2010, 02:07:24 PM »
Greetings,

I am not sure if this is the right board or not but it seemed the best one. I recently signed some paperwork a few years ago to get 2 lots over into my name as a gift. I am now going to be taking over the properties in full starting just after the first of the month.

They are all rented out (4 rentals, though one is just a lot rental). I have never been a landlord before so I was looking for any advice about thing I should check out to make this the best situation for myself as possible. From what I looked at all together it should be a nice bonus monthly income after I pay the taxes, and minor utilities (water/sewer, trash on one) I pay for on the rentals.

Currently I will need to go over and tell each of the renters that I am the person they will be paying to from now on, and then at the end of next month I will owe on all the utilities, and I will have to check on the amount of tax due and set off that amount.

I was wondering what kind of insurance I need to get to protect myself from any type of lawsuit due to owning this property.

Thanks in advance!

Offline ZenGunFighter

  • BANNED.
  • Survivalist Mentor
  • *****
  • Posts: 527
  • Karma: 60
  • Banned
Re: Any advice for a new rental property owner?
« Reply #1 on: May 12, 2010, 02:19:35 PM »
Be VERY careful when placing tenents. It is better for the unit to be vacant than to have someone not paying and destructive.
Sign up so you can get credit reports. Your application should have the necesary info and permission to get the report on a perspective tenent.

On the application, ask for previous residences. Check them against those listed on the credit report. If there are variations, that is a red flag.

Don't just talk to the current landlord, talk to the one before that. He'll tell you the truth. the current one may lie to get rid of a troublemaker.

Become familiar with the process for eviction. Usually the first step is some sort of notice.

Determine who will be living in the unit. It needs to be on the lease. If the lease says one person, and a second one moves in, take immediate action. start eviction procedings or void the old lease and start a new one.

Remember, it is better for the unit to be vacant than to have a crappy tenent.

Offline Alpha Mike

  • Survivalist Mentor
  • *****
  • Posts: 805
  • Karma: 30
  • I'm preparing for a lack of imagination.
Re: Any advice for a new rental property owner?
« Reply #2 on: May 12, 2010, 02:44:32 PM »
Just another option... A management company saves you a lot of headaches, but they don't do it for free.  They collect the rent and send you a check.  I did not want to be a full time property manager.
I have 4 rental properties all under management contracts.  It works for me, but your situation may be different than mine. 

Offline ColdSoul

  • Prepper
  • **
  • Posts: 60
  • Karma: 5
Re: Any advice for a new rental property owner?
« Reply #3 on: May 12, 2010, 03:19:58 PM »
Thanks for the advice. I know if I have to rent one out to a different person I will for sure do some background/credit checks.

Offline LvsChant

  • Resident Master Mudder
  • Global Moderator
  • Survival Veteran
  • ******
  • Posts: 7548
  • Karma: 609
Re: Any advice for a new rental property owner?
« Reply #4 on: May 12, 2010, 03:34:46 PM »
Nice gift, btw... I'd start by asking as much as I could from the person who has been taking care of this up to now. They can tell you about the current renters, how things have been run in the past and even tell you about the insurance they have been carrying. They can also give you an idea of how much they've been putting into the property maintenance on the units.

By talking with whoever you have your own homeowners' insurance you can find out general info. on property insurance and liability. The renters are responsible for their own renters' policies, but you would want to have insurance on the structures, as well as liability to protect yourself (talk to someone in the business about this).

Good luck to you!

Offline willille

  • Prepper
  • **
  • Posts: 87
  • Karma: 0
Re: Any advice for a new rental property owner?
« Reply #5 on: May 12, 2010, 03:48:31 PM »
My dad and grand dad both had a fair number of rental properties. From what they went through a management company seems attractive.

Offline joeinwv

  • The Bee Whisperer
  • Survival Demonstrator
  • *******
  • Posts: 2579
  • Karma: 92
Re: Any advice for a new rental property owner?
« Reply #6 on: May 12, 2010, 03:51:09 PM »
Get a lawyer now. Get a good, reliable handy man.

Offline fred.greek

  • Survivalist Mentor
  • *****
  • Posts: 778
  • Karma: 41
Re: Any advice for a new rental property owner?
« Reply #7 on: May 12, 2010, 08:37:57 PM »
Get an experience management firm, AND ensure you know the applicable landlord - tenant law, and keep up on changes.

I really mean it when I tell my agent I LIKE paying him his percentage, since it means I don't get whining calls at 2:00 AM when the toilet stops up...


Offline mash

  • Dedicated Contributor
  • ******
  • Posts: 1065
  • Karma: 36
  • it's spork-tastic!
Re: Any advice for a new rental property owner?
« Reply #8 on: May 13, 2010, 03:59:09 AM »
My dad and grand dad both had a fair number of rental properties. From what they went through a management company seems attractive.

Ditto. My dad got a duplex as an investment property... In less than a year he sold up, and only went with houses after that because of all the heartaches + property damage he had to deal with.

Offline tamo42

  • Survivalist Mentor
  • *****
  • Posts: 527
  • Karma: 23
    • The Primal Prepper
Re: Any advice for a new rental property owner?
« Reply #9 on: May 13, 2010, 06:06:37 AM »
ColdSoul, to answer your question more specifically about insurance, you'll definitely need a landlord policy.  This basically covers fire (and possibly flood).  The tenant's property is to be covered by his renter's insurance.  Any damage the tenant does to your property is not covered by insurance, which is why everyone is saying you have to be so careful about placing tenants. 

Additionally, you may want to consider an umbrella insurance policy.  This is to cover anything else that might happen.  E.g. your tenant invites someone over, that guest gets drunk and falls down the stairs. 

Usual not-a-lawyer-or-insurance-salesman disclaimer.

Offline PaCoTx

  • Survivor
  • ***
  • Posts: 111
  • Karma: 3
  • Halt! WHOO goes there?
Re: Any advice for a new rental property owner?
« Reply #10 on: May 16, 2010, 07:03:09 PM »
ColdSoul, to answer your question more specifically about insurance, you'll definitely need a landlord policy.  This basically covers fire (and possibly flood).  The tenant's property is to be covered by his renter's insurance.  Any damage the tenant does to your property is not covered by insurance, which is why everyone is saying you have to be so careful about placing tenants. 

Additionally, you may want to consider an umbrella insurance policy.  This is to cover anything else that might happen.  E.g. your tenant invites someone over, that guest gets drunk and falls down the stairs. 

Usual not-a-lawyer-or-insurance-salesman disclaimer.

ColdSoul,

I'll second all of this advice.  Get a landlord policy and an umbrella policy for liability.  I would also recommend using an established management company.  Not only will they take care of the midnight calls that a lightbulb burnt out, but they will do a better job at getting the unit turned around fast and rented to a qualified tenant when the current occupant moves out.  The only advice is don't forget to manage the management company.  Check the property regularly, make sure it is being kept up, look for pets and lease violations, etc.  Remember, it's your money.