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Are You An Accidental Landlord?

For many - your home bought a few years ago can't be sold. And now, life has changed - many of you have to relocate or your situation has changed enough that it requires you not being able to live in your current home.

If you do not want to short sale or foreclose - the other option is becoming an accidental landlord - one who doesn't want to be a landlord - but because of circumstance - has to be.

Things to consider if you are in this situation:

  1. If you live out of state, you should hire a property manager.
  2. If you live in state, you could give it a try on your own. Keep in mind, it is not as simple as placing a for rent sign up and collecting rent. Know the Landlord Tenant Act inside and out, follow the fair housing rules/laws and know what is required of you and the home you are renting to keep yourself out of court.
  3. More than likely, the rent market value will not cover your mortgage.  Be prepared to come up with the extra money to pay the mortgage.  It is better to have the home rented and receive some income, rather than it being vacant because you can't rent it for what you want or need.
  4. Last, consider hiring a property manager!   Even if you live nearby.  I talk to landlords everyday who say, "I've had enough - I don't want to be a landlord and don't want to handle renters anymore."  Don't spend a year or longer getting to this point - talk to someone before you make the decision to do it on your own.

It's not hard being a landlord.  But it is time consuming, can be frustrating, and it can cost you money if you don't know what you are doing.  Make sure to educate yourself and be prepared!

Buying or selling Tucson real estate, Mt Lemmon, Tucson bank-owned homes, Tucson rental homes, or Tucson lease option homes? Visit www.KGCPropertiesLLC.com .

                                                 

 

This blog is written with my opinions and my opinions are  presented with accuracy but not guarantees. Please talk to a professional before making any real estate, financial or agency decisions.    Gabrielle Kamahele Rhind - 2014. If you want to reprint parts of this - just email me for my permission: KGCProperties@gmail.com .

 

Comment balloon 14 commentsGabrielle Kamahele Rhind • March 16 2011 09:18AM

Comments

The right property manager is key! I have an out of town customer who has found the ideal property manager. What a break for me... he's got an offer in on property #3!!!

Posted by Margo Currie (Exit 1 Stop Realty) over 7 years ago

Excellent tips for homeowners who find themselves in the position of renting their properties.  It's harder than you think and knowing the laws is imperative. 

Posted by Cinnamon Wright, Assistant to Tish Lloyd (Wilmington Real Estate 4U 910.547.1446) over 7 years ago

Being a Landlord has its ups and downs.

Posted by Steve Traylor, ASHI Certified Home Inspector (A+ Home Inspections dba A+ Services, LLC) over 7 years ago

Sometimes we fall into the landlord position, often times it is best to find a property manager to handle it for us.

Great post Gabrielle!

Posted by Tom Arstingstall, General Contractor, Dry Rot, Water Damage Sacramento, El Dorado County - (916) 765-5366, General Contractor, Dry Rot and Water Damage (Dry Rot and Water Damage www.tromlerconstruction.com Mobile - 916-765-5366) over 7 years ago

Good advice, Gab,  for one of those little surprises in life. Most states have landlord groups just like there are tenant associations. Join one where your property is and learn all about the laws you must follow. 

Posted by Glenn Roberts (Retired) over 7 years ago

Plan B, can't sell / don't want to sell now -becoming the Accidential or Default Landlord.

Knowing or getting the required help in this real estate business can make all the difference.

Good advice in post to the small property owner - seeking options.

cheers

Nor 

Posted by Nor Yeretsian, Envoy Capitol Realty Inc., Brokerage Toronto (Envoy Capitol Realty Inc.) over 7 years ago

People should also find a local Landlord or Property Owner association - those groups can be invaluable sources of information for beginning landlords.

Posted by Ann Bellamy (Hard money lending for investors in NH and MA) over 7 years ago

Excellent post and points.  I love the title and the need for thought before you leap into leasing out your home with proper professionals handling ... will save you more money in the long run!  All the best for a wonderful Wednesday.

Posted by Connie Goodrich, CRS ABR (McKinney Realtor)Texas (Keller Williams Realty) over 7 years ago

Gabs, heck I use a property manager for my Rental Properties even though I am located in the same town. This investment is very important and that 10% I pay is well worth the money. The fee is also tax deductible in my state…

Posted by Paul S. Henderson, REALTOR®,CRS,, Tacoma Washington Agent/Broker & Market Authority! (RE/MAX Professionals.) over 7 years ago

I just switched over to a real estate brokerage that offers full real estate services and property management. The manage homes for $60 per month-no other fees. Keep your options open. Purchase real estate

Posted by Harry F. D'Elia, Investor , Mentor, GRI, Radio, CIPS, REOs, ABR (Real Estate and Beyond, LLC) over 7 years ago

Gabrielle,

Without a doubt a property manager is the best route because it better enables you to keep it as the business it really is. No emotional decisions. I was helping future clients move from Colorado to Seacoast NH last summer and previewed a number of temporary rentals for them. One owner/landlord I met told me this story. She and her husband needed a larger home and built this house on the other side of town and placed the first on the market as a FSBO. She was in the mortgage business and really should have known better. They eventually found a buyer and signed an agreement. Before they could get to the closing table, the buyer's financing fell apart, and as she put it, "And that's how we got into the landlord business." That was three years ago.

Posted by John McCarthy, Realtor - Seacoast NH (Bean Group Portsmouth NH) over 7 years ago

Gab,

Important message for owners...and a fantastic tie in to your new business. Very creative.

Rich

Posted by Richard Iarossi, Crofton MD Real Estate, Annapolis MD Real Estate (Coldwell Banker Residential Brokerage) over 7 years ago

Gabrielle - I tried this in 1993...it was a harrowing experience! I bought my first condo in 91, decided I wanted to move in 93, and had to rent it. My tenant was difficult at best. She made it hard to sell in the end too. I am actually planning to get my property management permit to help augment the business we do have. We have plenty of people we refer out every day because we don't handle rentals here....

Posted by Christianne O'Malley, Exceptional Service - Delivering Results in Reno! (RE/MAX Realty Affiliates) over 7 years ago

HI CHRISTIANNE! Sorry to hear about your experience - but it's good experience if you do get your permit to manage!  Let me know how that goes!

HI RICH!  Well thank you - it's been fun to incorporate different posts into my blog! Nice to see you here as usual!

HI JOHN!  And there you have another type of accidental landlord! Thanks for sharing the story!

HI HARRY!  Nice move for you considering all the investors you work with!

HI PAUL!  You are my hero!  It takes a lot of time and effort to maintain rentals - and the tax deduction is always a bonus!  I believe you can do the same in Arizona!

HI CONNIE!  This is along the same lines of FSBO -- it's just better to get advice first and really know what you are getting in to!  Hope you had a terrific Wednesday as well!

HI ANN!  Great tip - thank you!

HI NOR!  Thank you!

HI GLENN! Great advice to share - agreed - if you are going to do it solo - this advice will help a great deal!

HI TOM!  Agreed! 

HI STEVE!  It does - but I find it very rewarding on many levels!

HI CINNAMON!  Yes- I agree - it's not as easy as putting up a sign and collecting rent!

HI MARGO!  Congratulations!  All the way around!

Posted by Gabrielle Kamahele Rhind, Broker/Owner (KGC Properties LLC, Tucson Property Management & Real Estate) over 7 years ago

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