We plan to R2I next year and want to rent our townhome. We live in NJ and if we actually sell our home, we will end up with a 10K loss. Not much compared to some other locations, but still 10K is something. also there is the closing costs. I think the RE market locally will pick up, so that I can break even price wise.
Now my question: if we rent it out, can we have the appliance, electric, plumbing etc on an insurance (like AHS). WE pay the the annualy fees but the renters pay the service call fee. Is that possible or even legal? Anybody done that.
We have a good association that cares of everythign outside including the roofing, siding and other home exteriors.
Renting townhouse - managing maintenance
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brokenarrow
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Renting townhouse - managing maintenance
brokenarrow;282933We plan to R2I next year and want to rent our townhome. We live in NJ and if we actually sell our home, we will end up with a 10K loss. Not much compared to some other locations, but still 10K is something. also there is the closing costs. I think the RE market locally will pick up, so that I can break even price wise.
Now my question: if we rent it out, can we have the appliance, electric, plumbing etc on an insurance (like AHS). WE pay the the annualy fees but the renters pay the service call fee. Is that possible or even legal? Anybody done that.
We have a good association that cares of everythign outside including the roofing, siding and other home exteriors.
We are in same boat. Except for the fact that we are loosing 50K (plus closing costs). Our decision? Sell it off. Few reasons that made us take the decision
1. How can you be sure that the market will pick up and you will eventually make up for the loss
2. If you outsource the maintenance, renting etc, are you even getting money each month to cover for mortgage, tax, association fees etc? I doubt
3. Peace of mind.
4.
If and when the market picks up and you decide to sell, how will you sell? Through your friends? How motivated will they be to get best price for it?
All that said, is hassle worth it for 10k? is the question. Just some thoughts to consider.
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brokenarrow
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Renting townhouse - managing maintenance
Those are some good questions and we were pondering on it too. Here is the situation:
I just refinanced the mortagage @ 3.75% 5/1 ARM, so we are good on that front for next 5 years.
The expected rent actaully cover the mortgage, RE tax and the assoc fees.
I have my house on sale for owner to test waters and the response has been good. 2 families dragged their brokers to our house as w ehave an end unit and there are 2 middle unit son sale close by. One of them was interested but less 15K the price we are asking (I have listed it 5K more then what I bought for).
The township is good with excellent schools, so I think the changes are fair that th eprice will go up slightly. Now i am not looking to make big money, but just break even.
The only bummer is the maintenance and how the tenants will turn out to be. aslo there is the issue of not being able to rent for some time.
Another option is to delay R2I by another year, but we really do not want to do that unless absolutely necessary.
I just refinanced the mortagage @ 3.75% 5/1 ARM, so we are good on that front for next 5 years.
The expected rent actaully cover the mortgage, RE tax and the assoc fees.
I have my house on sale for owner to test waters and the response has been good. 2 families dragged their brokers to our house as w ehave an end unit and there are 2 middle unit son sale close by. One of them was interested but less 15K the price we are asking (I have listed it 5K more then what I bought for).
The township is good with excellent schools, so I think the changes are fair that th eprice will go up slightly. Now i am not looking to make big money, but just break even.
The only bummer is the maintenance and how the tenants will turn out to be. aslo there is the issue of not being able to rent for some time.
Another option is to delay R2I by another year, but we really do not want to do that unless absolutely necessary.
Renting townhouse - managing maintenance
brokenarrow;282992
The only bummer is the maintenance and how the tenants will turn out to be. aslo there is the issue of not being able to rent for some time.
That is exactly what my point is... Is the above mentioned hassle worth 10k? I am not saying 10k is a small amount. But will you favor getting 10k or favor getting peace of mind in exchange? Only you can answer that.
Renting townhouse - managing maintenance
3.75 for 5/1 ARM is good rate. If your mortgage and escrow is covered by the rent you may be at loss. Property management, vacancy time, unexpected repairs. To make it breakeven you should have 4 or 5 hundred dollars positive cash flow.
BUT, if you have ideas to come back to US and confident on your property then just RENT it.
BUT, if you have ideas to come back to US and confident on your property then just RENT it.
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brokenarrow
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Renting townhouse - managing maintenance
Thanks for the replies guys. I guess I will hold on till next year and try to sell it off and take the loss. I have a colleage here and the stories he tells me about renting scares me. He rents out 3 units!!
Renting townhouse - managing maintenance
brokenarrow;283011Thanks for the replies guys. I guess I will hold on till next year and try to sell it off and take the loss. I have a colleage here and the stories he tells me about renting scares me. He rents out 3 units!!
Right.. His scary stories are when he lives in the same town (I am assuming).
When you rent out across the globe, the scary story becomes scarier.
Not trying to scare you by all this. Just giving thoughts (since you asked for them).
Renting townhouse - managing maintenance
Agreed with the above posters. The North East is pretty scary right now...and so is the rest of the country. Even IF you have a great rate (and you do). Peace of mind...is at the top of my list. It sounds like you want them to pay for utilities and service calls. Which is absolutely fine. No one wants to pay for heat. One option (and yes its a scary one)...is to section 8 the property out. There are many horror stories Re: Section 8, and the quality of people that you may encounter..and YES, you will get a little LESS rent than you otherwise would have...but that government check comes on time, everytime...and if you are good, you can find a broker that will also manage the propery for you (for a small fee).
I have a property in that we section 8'ed and its something we would never live in..(the schools are subpar..basically its a city propery). And I actuallly got More rent than I went private and you can even opt for direct deposit.
Some other things to consider internally, is how much do you have left on your mortgage balance, and the years to amortize the loan. If you are getting close to a paid off townhouse.....then the possibility of rental income after a paid off home is worth the sacrifice.
We are going on assigment, and we plan on selling of our primary....which which is at a fantastic rate like yours and will paid off in 5 years (we took a 15 year fixed, 10 years ago).....and our first choice is to sell it..even though its almost paid off.
The peace of mind and the economy is too volatile to chance it. There is a chance (good one)..given the market today, that it wont sell..so rental may be our only option.
I think another poster asked a very good question..if the move is permanent...get out while you can. If its 50/50...then you can chance the rental for the long term return.
I have a property in that we section 8'ed and its something we would never live in..(the schools are subpar..basically its a city propery). And I actuallly got More rent than I went private and you can even opt for direct deposit.
Some other things to consider internally, is how much do you have left on your mortgage balance, and the years to amortize the loan. If you are getting close to a paid off townhouse.....then the possibility of rental income after a paid off home is worth the sacrifice.
We are going on assigment, and we plan on selling of our primary....which which is at a fantastic rate like yours and will paid off in 5 years (we took a 15 year fixed, 10 years ago).....and our first choice is to sell it..even though its almost paid off.
The peace of mind and the economy is too volatile to chance it. There is a chance (good one)..given the market today, that it wont sell..so rental may be our only option.
I think another poster asked a very good question..if the move is permanent...get out while you can. If its 50/50...then you can chance the rental for the long term return.
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brokenarrow
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Renting townhouse - managing maintenance
Thanks mom2gurls. My move would be permanent to India. My colleage stays in the same township that he rents out his units and he still has nightmare managing it.
What is section 8?
What is section 8?
Renting townhouse - managing maintenance
well the word section 8, has a bad rap. Basically its a voucher program that people/families get to put towards their housing. In a nutshell the government pays the bill.
Its hit or miss with the section 8 people. With the cost of living in major metros....even those that have relatively high incomes cannot make it, so they apply for section 8, and it usually takes YEARS to get approved. There are some scammers (i.e. the welfare folks on the system)....and there are real honest people trying to do better for their situation and want to move into a nicer area and cannot afford to do so. Some people are a combo....meaning the government pays a portion and they pay the difference.
You still can work with a realtor and help try and "pick" a good tenant...and its hit or miss. Ours (knock wood) is a great family..they pay their own heat..we pick up the water bill. But there are those challoo people that want to squeeze ahd milk every nickle and dime to you and want it for free.
Its up to you as a landlord to try and find a good situation though. And be forewarned..your neighbors may not like that you have section 8'ed your property and you have to find out if yo ucan do so.
On the other hand, from a landlord standpoint, its a guaranteed check every single month, on time evertime. Somtimes you get lucky and just find some retired folks.... Personally speaking if you are permanent..just sell and take the loss..not worth the headache.
http://www.state.nj.us/dca/one/sect8.htm
Its hit or miss with the section 8 people. With the cost of living in major metros....even those that have relatively high incomes cannot make it, so they apply for section 8, and it usually takes YEARS to get approved. There are some scammers (i.e. the welfare folks on the system)....and there are real honest people trying to do better for their situation and want to move into a nicer area and cannot afford to do so. Some people are a combo....meaning the government pays a portion and they pay the difference.
You still can work with a realtor and help try and "pick" a good tenant...and its hit or miss. Ours (knock wood) is a great family..they pay their own heat..we pick up the water bill. But there are those challoo people that want to squeeze ahd milk every nickle and dime to you and want it for free.
Its up to you as a landlord to try and find a good situation though. And be forewarned..your neighbors may not like that you have section 8'ed your property and you have to find out if yo ucan do so.
On the other hand, from a landlord standpoint, its a guaranteed check every single month, on time evertime. Somtimes you get lucky and just find some retired folks.... Personally speaking if you are permanent..just sell and take the loss..not worth the headache.
http://www.state.nj.us/dca/one/sect8.htm