Yes, we have had rental property for years. Unfortunately for us, it was because we got both houses back that we sold and we held second mortgages on them. We were lucky that both were still in good shape and we lost very little money on them. However, both houses were in Texas and by that time we were living in another state. We eventually sold one of them but the other we still have.

If you are in the same area, you can keep an eye out on the property and make sure it is maintained. Make sure to rent it for a profit of course but that would be after you have allotted money for repairs that may be needed while rented and for fix up when the renters leave. If your husband can do the repairs make sure to allow for hourly rate of work plus materials. Either charge for your doing or having lawn care done. If they want to do the yard care, then add a clause for penalty if it isn't maintained to the standard of the neighborhood. And add a penalty fee for late payment.

We will be selling this house when my husband retires and he can go out to Texas and do the fix up to put on the market himself.

The reason we kept it so long (since we left in 1984) is that the housing market in Texas went flat long before other areas and never really recovered. The house is now worth about what we sold it for in 1984. Of course, it is long since been paid for and we will take that money to buy investment property here.

My husband manages our rentals. He started investing at a very young age.
Being a landlord is not for everyone. You will need to learn how to screen a potential tenant. For years, my husband would just use his intuition during the interview. Where do they work and what is their income? When our oldest needed a guarantor for her first apartment, it required tax returns! He now asks for this to assure the tenant can afford the apartment.

There are times he has interviewd the person where they live. Lots of information there!

You will need insurance, so talk to your agent.

Will you be nearby? If not you might need someone as a go between until you can trust the tenant. We have tenants that are in charge of shoveling, calling if things are in disrepair etc. But, not everyone is capable of this.
As strange as this sounds, our apartments (and homes) are all rented under market value. We get nicer, long term people this way. It gives people the wiggle room they might need when life throws a curve ball.

He reads them "the riot" act. We run quiet, safe and clean places. If you want to party, this is not the place. As the last tenant in, if there are complaints from the other existing tenants, you will have to go. Usually things are worked out but some do leave.

Since you have lived In your house, you know the quirks and the ins and outs. I would make sure everything in repaired and up to date.

You will need to be clear about guidelines. Nonsmoking? Can they paint what they like within reason etc.

We have a 2 family rental. I learn something new every time we get a new tenant.

Have an attorney check over your lease. My "newest" tenant is actually an attorney and said I worded the "no smoking" part wrong. Its not an issue now but I plan on having him rework my lease before I rent to anyone else.

Put everything in writing in the lease. Don't assume common sense.

Trust no one and do background checks on every prospective tenant. I make prospective tenants give me a copy of their current credit report. It would have saved me thousands if I had always done this.

I wish I could say I could just my gut. Most of the time it is right on but one time it was very wrong. My nice divorced mother of a pleasant child, with a good work history.... suddenly quit her job as she was working on the side as a hooker and drug dealer and decided to do this full time out of our apartment.

Be sure to have in the lease the number of holes they can put in your walls to hang stuff. Had a very nice tenant who put hundreds of little holes on every wall. Had every wall covered in pictures. Then wanted to help us by repairing them very badly.

Check with your insurance agent! Around here any income property that is not owner occupied costs a fortune to insure and very few companies will cover you.

Thanks, all good things to consider.

We haven't lived in that house. It is one in town we are considering for ourselves. The plan is to sell the house we are in and move into town to be closer to my mil. I have been watching the real estate market and the rental options and there isn't much out there.

We fell into Dave Ramsey trap of getting rid of credit cards and eliminating all debt several years ago - at least until I found out that debit cards, not even Visa, are as good as a credit card. Most of the rental houses listed on CL say something about credit score of 600, and I doubt ours is that anymore since we don't have any debt.

Plus, I wouldn't want to rent for a year and all the rentals were a year lease. It would be a gamble to sell ours and find a house we could/would live in before our house closed. Easier to buy a house now and then move if we sell ours.

Funny how we can buy a house easier than renting, isn't it? lol

My parents rented properties for extra income most of their lives. If you have good tenants, it's a pleasure. If you have bad ones, it's a nightmare.

There are a lot of rules, regulations and legal obligations around renting and you need to understand them or you will be sued. I like to watch Judge Judy and it's eye opening. You need to find a primer for rules and regs in your state re landlord and tenant. There is an apartment forum in GW that has some threads on that too.

The lease is absolutely the document that must fully represent every iota of the agreement between landlord and tenant. There can be no verbal alterations or agreements beyond that document. If you want to change anything, it must be done in writing and signed by both parties.

Take before move in and after move out pictures of the house so that you can defend the security deposit.

Have a clause in the lease that any repairs under $150 or $200 or whatever are the responsibility of the tenant. It will help prevent things like the time my dad was called because the light was broken in the refrigerator...he went over and tightened the bulb. Or the time he was called because the oven was smoking...it needed cleaning.

If you are in the area, then I would schedule an inspection every couple of months just to protect your interest in the property...make sure the proper number of tenants are living there, the place is not being destroyed with pet feces or whatever. You can be amazed by what people are willing to live with.

Absolutely do due diligence on vetting the tenants with income tax statements, references from prior landlords, credit ratings, etc. You need to protect yourself financially as well.

Brother owned a rental property and rented to a fellow who, unbeknownst to him, had his GF move in. He left but she stayed and didn't pay rent. So he went to evict her. Turns out, all she needed was a single piece of mail with her name on it at that address to prove she was a resident and he had to bring eviction proceedings against her! And she knew how to work the system...it was months before he got rid of her.

My parents also had a fellow live in their little house for over 20 years...he took better care of the place than they did, and he paid his rent like clockwork, even installed a new heating system (he worked for a hvac company) and he was a good neighbor. So it can go both ways....

When my mother and aunt became unable to manage their rental property, we found them a property manager. It was wonderful. He takes 10% and does literally everything. When we inherited the property, we kept him. We are managing it better and making more improvements now, but would be lost without him. There is so much to know legally and it does take signigicant time if you are not prepared. (or if the property is in disrepair as it was when we inherited it)

As a younger person, I tried to maintain a rental that was out of state. Just impossible, ended up with squatters. Eventually, sold it. I didn't have a property manager, or I may still have it.

Someone suggested having a clause for the renters paying the first $100 or so of any repair. We never got many requests for repairs and actually had the same renters for a number of years. When they left, we found out that the stove had only one working burner! The house still had its original carpet from 1978 when we bought the house new - and this was like 20 years later - no joke! We knew we had a lot of work to put in the house and we spent about 15,000 to get it back in shape. The management company we had never checked things out and yes, it was our fault for not making sure it was done but being so far away, we just didn't push it. They paid their rent and if they were late, they paid the large late fee.

Anyway, after that we changed management companies and they got a new renter into this "practically new" house. That renter had some complaint each month that would often cost us at least $200.00 It was for small things like a branch of a tree being too low over the driveway or a faucet that dripped all the time. Since we are so far away, the management company would hire someone to go out and fix it. The last straw was when we were charged $100.00 because the renters couldn't get the heat pump switched from cooking to heating. Anyway, after their one year lease, we refused to renew them. I get a call from another guy who they want to rent a house from. He tells me the guy we rented to is OCD and has some issues with anxiety and that is why we had so many repairs on a house that was just remodeled!

The only way he would consider renting to him was if the renter paid the first $200 of any repair and he limited the repairs made to those he decided were of major concern. Of course, this guy is in town and could go check everything out and do any repairs himself, if practical. Don't know if the lease went through or not.

So, yes, you have to write all your specifics down and make sure to "oversee" the property.

We've rented our previous home out for the last 18 years. Like others mentioned, we use a property manager and consider it money well spent. They provide a report each month, showing cash flow and various categories from which money is spent. When it comes tax time, we use their annual report and it's easy-breezy. For example, the IRS treats maintenance expenses differently than repair expenses for rental property. They know all of this so their report matches what the IRS asks us for. They are also up-to-date on laws as they change. When it became mandatory for Calif. landlords to have carbon monoxide alarms in rental property, they took care of it and notified us. They also handle rent increase negotiations and tenant requests. Besides all of this, we get the security that comes from them screening tenants and managing late rent etc. It is money well spent. We rent our property for $2100/month, and pay them $150/month. In all this time we've never had a problem.

We've always used a property management firm. Neither DH nor I want to deal with renters, repairmen, leases, calls in the night or weekends etc. The 10% fee is worth it for us. Our company does it all - for an additional fee they even clean and paint in between renters.