[monkeywrangler71]

I'm thinking about buying property to rent out - what do I need to think about, read, know?

I've looked at tax implications, but don't know where to look to find out about whatever else I would need to know (or don't know what else I need to know and therefore can not search for it).

I expected to get shot down at the 'hey hubby, what do you think about rental properties' stage, but he thought it was a great idea :shrug2:

 

[lisa0069]

Let me just say I am finally selling mine after 8 years. Tenants can really cost a lot and do a lot of damage that you never get the proceeds back from. Put it this way, new carpet for the last tenant, now had to put new carpet again 1 year later, new dishwasher because they washed a little kitchen rug in there you know with the rubber back, broken windows, broken window locks, missing ceiling light fixtures, broken down tree in backyard and it still had green leaves, etc etc.

Yes you can deduct the mtg, the interest, claim the rent as earned income, but if you don't have extra stashed away and it sits you are still paying that mortgage. Schedule C is what you fill out on the 1040 at tax time. I also had the benefit of not having to deal with the tenant as we had a mgmt. company and they usually want 10% of the rents, and a rerenting fee, witch is taken from the rent on the new tenants.

HTH.

PS Oh your are not in the USA sry I guess those taxes don't count for you but will leave for others who may be curious.

 

[lisaflex]

there are lots of pros and cons to being a landlord.

a few cons that we have experienced:
-vacant for 5 mths
-water heater going on 12/23 and having to pay holiday fees as they couldnt go to a hotel (that we would have paid for) as they had a little girl who was waiting for santa
-flat top stove blew up (not going to elaborate on that one)
-one of our tenants chopped down (entirely) a gorgeous lilac tree w/out or knowledge or consent
-electrical panel blown off house (act of nature) and having to scramble for the $$$$ as it was holiday time (once again...).

there are landlords on this board who will chime in and give you some very good advice. it is a learning curve though, i must warn you! we never set out to be landlords...just decided to move and rent our old house out. dont forget about the rental dwelling insurance policy either. make sure your umbrella policy covers that property also.

personally, i am tired of the crap that goes aong with it. the late rent, the stories, the lying, the cops (we have had some "issue" tenants and our property is in a quite rural area) that being said, if we could just find the perfect family tenants that would stay, be happy, pay on time, etc///my mind might change! but, we cant sell for a few yrs due to the economy. it can definitely be a challenge at times. always remember, they (your tenants) will NEVER treat YOUR property as their own.....

its not theirs and they dont have to worry about it....that part just plain ole sucks imo

 

[frugalfranny]

Have NO CLUE on what the tax implications are for you but they are usually a plus.

BUT.......

Check out the landlord/tenant rights, and responsibilities you have as a landlord.

Write an EXPLICIT AND TIGHT rental agreement. Check out your rental market and know what you can charge for rent.....even go look at some other rentals that sound like the same quality as yours to see what people are getting for the $.

When renting...........go back past the last landlord to check references.............remember, if they were bad, the prior landlord wants to get rid of them.........go back past that.

KNOW what the basic 'scams' are for your area........and put a 'legal clause' in the agreement to cover those. IE: one here.........two people (that can pass refer. and credit) rent the place and then move more people in.........I write a 'clause' that anyone staying longer than two weeks can draw a rent increase...........perfectly legal and has saved me a couple times.

 

[lisaflex]

also, use a reputable background checking service. do criminal checks also. be very specific in your lease whether it be yrly or mth to mth (which ever you choose)

also keep in mind depending on the type of property (kid friendly or not) that most like to move in the warmer mths and be settled before the school year starts.

have you thought about where to advertise? will you rent to college students?

 

[sunshine]

I've had good and bad renters --

one of my current properties has a good renter, but he's moving out at the end of this month to buy a house. I'm terrified of what might happen to this property.

I agree that the sitting empty can be costly, but it's more costly to put in renter that will destroy your property. (I had one leave in the middle of the night, never to be see again. When I went to check the property, they'd stolen the light fixtures, carpet, windows, doors, cabinets, toliet, sinks, etc. I was basically left with walls, roof and floor - many of which had large holes in them.)

I don't rent to make a lot of money - I just want my costs covered and the taxes paid (all my rental property is paid off, so I don't have mortgage costs to figure in to that). I try to rent to people who are having a hard time financially, but are able to at least pay the small rent I charge.

My property is sentimental to me, and waiting to be left to my kids. . . (my parent's farm, dh's and I first house, etc.)

You'll need to figure out WHY you're getting the rental property,what your goals are, etc. Sometimes it takes some deep thinking to figure out exactly what your inner thoughts are on this.

 

[lisaflex]

some great points, sunshine

 

[Greebo]

Read.

A LOT.

Go to the book store and pick up about a dozen books on real estate investing and property management.

Do nothing else related to income properties until you've read them.

 

[monkeywrangler71]

Read.

A LOT.

Go to the book store and pick up about a dozen books on real estate investing and property management.

Do nothing else related to income properties until you've read them.

Do you have books that you can recommend?

 

[Greebo]

I like Robert Irwin - but you should seek a Canadian author on the subject too.

 

[Bachelor]

What about renting out rooms?

I am looking at returning to graduate school for a PhD. I have been considering buying a house with multiple bedrooms and bathrooms and renting out some of the rooms to cover the mortgage.

 

[Greebo]

I am looking at returning to graduate school for a PhD. I have been considering buying a house with multiple bedrooms and bathrooms and renting out some of the rooms to cover the mortgage.

I wouldn't recommend this.

Unless you intend to stay in that college town for 5 years or more, you'll lose tons on the closing costs.

You could graduate then not find a buyer.

Overall - too much risk - and btw - how will you replace the furnace and water heater when they explode in the middle of winter?

 

[lottaLove]

Check out the CMHC website, they have some nice basic information that would be a good starting point when youre trying to figure out what to research:

For Landlords ? Just Starting? Get Informed | CMHC