How do I learn whether or not I'm in a landlord unfriendly or landlord friendly state? I'm in CA if that clears anything up. Our real estate agent owns rentals and said she'd be happy to discuss with us as well. Let's see, in this house the finishes range from 17 years old (most windows), 10 year old kitchen, 4-5 year old bathrooms (floors in those spaces were done at remodel) <1 year old flooring in hall/bedrooms/living space. Basically we lived here for 17 years, slowly update from the original stuff. We know the house well. Our neighborhood is popular for rentals, both neighboring homes were rentals for 10+ years but now are owner-occupied. I would want to be choosier about tenants than they were. However, putting tenants in our house wouldn't be weird. we do have fruit trees, though, that require maintenance. Id consider doing the tree and yard maintenance myself, is that weird? As long as the tenants water the backyard I don't even care if they mow, it's a pretty established, low maintenance yard at this point.

cleo, I cannot understand the wisdom of "tenant is responsible for repairs under $100". Many little repairs will go undone, and that tiny drip can cause a lot more damage when the renter waits until it becomes a $300 repair. Or the repair will be with inferior quality materials, shorter life and higher risk of failure. We rented for many years and did many repairs and upgrades ourselves, with our own money. But that is not the norm. The owner should at least offer to cover the material cost. While renters should pay for things they damage, it really should not be the renter's responsibility to pay for household items at the end of their use life.

-whether it's economically advantageous. requires good analysis..local, timing, your personal finances, blahblah

-whether you, for some reason, believe you want to keep a property..to go live there again at some point, keep it the family, etc

-whether you have energy and time required to be a landlord

I already was a landlord once

so when we had to make a decision like that-my DH wanted to rent, I wanted to sell-I wanted to sell because I knew very well what it takes to be a landlord, while my DH didn't.

He's very good at finances..but I'm much better in calculating how much time something will take, how much energy it will demand, what will be the price to pay, and whether worth in your particular circumstances.

My experience in being a landlord, is that it is a lot easier if you live somewhat nearby. I enjoy having a contact list of fantastic people who will do excellent work; like my awesome plumber who has come to my house at a moment's notice and not charged me; gardeners I know and trust, etc. I felt it was important when we last rented our house to pay for the gardeners ourselves... and the water, because our experience in California is that tenants are not interested in maintaining landscape (and I am speaking of high -end rentals). It was more than worth it.

CA is not landlord friendly.

My cleaning lady owns a duplex and rents out the apartment above. She finally managed to evict the tenant that did not pay rent for 7 months. They lied about the number of people in the family, brought in dogs, trashed the place and threatened the landlord. Even in court, the judge sided with the deadbeat tenant and gave them more rent-free time. This is LA and the tenant was able to get free government services to fight the eviction by the landlord.

My cleaning lady came from Central America many years ago is a legal productive citizen who has worked very hard for everything she has. She lost about $15k in rent and lawyer's fees with the whole ordeal, not including cost to clean and remodel the unit. She is a caring person and tried giving the tenant a chance and was taken advantage of, by them and the system. So yes, CA is not landlord friendly!

Holy smokes chispa, those are the horror stories that make us not want to go in this direction.

melle, I think it would depend on your area and the people it attracts, but even high rents and supposedly civil tenants are no guarantee that you will have no problems. Wasn't it Palimpsest who had a rental in the Philadelphia area and rented to a group of "nice" college girls, who turned out not to be so nice.

I guess I've been lucky. We have owned two homes with rental units. One was a separate cottage and the other is an apartment above a detached garage.

We are very careful who we rent out to because they are so close in relation to our home. So far, we have had great tenants. But, we live in states where it is very easy to throw someone out.

I would never trust a tenant to do any yard work or maintenance. I price that into the rent. We don't permit animals and the units are too small for children or couples. It's a niche.

With the advent of Zillow, it's easy to advertise the unit. It takes about 10 responses before you find someone who fits your criteria. You have to be willing to actively manage this part of the process. If you think property management is set and forget, you need to sell.

CA is not a landlord-friendly state.

$400 above mortgage cost is not enough to cover maintenance, repairs, management fee, and vacancies. Professional landlords typically budget half the rent for those things.

I would sell.

Does it matter that we only have about 6 years to go before we no longer have mortgage payments?

Maybe you guys are right it would be dumb. I keep thinking it would be good, maybe the kids could live there when they're older. All property is becoming so expensive here, not sure how they could afford to buy anything when they are adults if prices don't level out.

melle you should never plan your kids lives for them with the what ifs. Just not nice to require them to pass up opportunities in other sections of the country just because they would feel guilty about a house or leaving their parents. While the idea seems nice there are so many problems with it that it is best to just forget it.

They are the ones begging us to keep this house, so I guess that's why I considered it. When I was on my own in college I would have appreciated some sort of assistance from family to pay for housing, so I'm totally projecting.

Our house is by the state college, maybe they would attend that college and not want to have to drive. But you're right, maybe they will want to do something else entirely. I would have attended whatever college I could if my housing was paid for, but it wasn't an option for me.

Edit -- > sorry I guess that was snarky, I don't even know why I posted this on the forum. I meant to do other research not just rely on random advice. It's very easy to post here and hope everything will become clear with enough advice, but it won't. I'm super stressed because we just bought another house and although we can afford both mortgage payments, we really aren't able to save much money during this time after all our other expenses. The old house is all fixed up nicely for the area and rentals are in demand so it seemed like maybe we should turn this house into an investment, and I'm just pulling at random thoughts as to all the ways the investment could possibly be a good move.

melle you are doing fine. Just hit a hot spot with me. I saw too many family problems in my husband's family both when his grandmother who live in Iowa but the nearest good jobs were 80+ miles away and when his father died. Both times the family had problems before both properties were sold with the people who said they wanted to keep it but had no intentions on living in them and the ones that wanted a clean break. Until she died my SIL cried every time the parents house was mentioned because it was sold. She did not care that it was sold to her brother it was just the idea it was sold.

I say rent it. We would have done the same if our CA home wasn't so mortgaged. I ended up having to leave the state after the sale simply because I couldn't afford to stay. Even with my 50% of the profit. I have six children still living there. The twins managed to purchase a house several years ago (S.CA) and they rent it out. The other four who might want to buy at some point will never be able to in CA. My oldest just sold her home in MI. She is moving to GA. She and her little family will never be able to afford CA. I count myself very very lucky that my ex was/is an engineer and is now in IT. The tech industry fed and housed my children for thirty odd years. Hold onto that house.

Melle, I am a new landlord. I'd rent it out if I were you. Don't stress out, 2 houses are better than one. :-) $400 gain is $400 gain, much better than nothing. You will also gain benefit from tax returns when you own a rental property, ask your accountant for more details. I'd hire an experienced realtor to find good renters. We paid a realtor the 1st month's rent after renters moved in for finding fee. We manage the rental property ( Carriage house) by ourselves since we are there on the weekend (Main house).

But a $400 "gain" is not guaranteed monthly income. Presumably the mortgage covers the taxes and insurance, but you have to pay for maintenance. Replace the roof or the furnace and there goes a year's worth of "gains." Or have it vacant one month and eat up a few months of gains. You get the picture.

And all of this is if you have good renters. Pick bad ones and you'll lose out on income when they don't pay and you go through the eviction process. Or you'll have significant repair costs when they move out because of damage they'll do.

Before you decide if you should step in to long-distance landlording, spend some time on the forums at mrlandlord.com. You'll either realize it's not for you, or you'll get some great tips from experienced people that will make you successful.

Thanks for the info on the mrlandlord -- didn't realize this existed! I think that's what DH and I are looking for, seasoned advice to help us decided if we would want to go down this road.

There might be a local landlord assoc near you. They were very helpful when we started last year.

Renters are not like you. That's hardly surprising, since they have no vested interest in the property. Many don't know beans about how to maintain a house. They don't know enough or care enough to alert you to a developing problem -- while expecting you to do everything but 'flush' for them.

We've owned SFH rentals. We currently own a vacation rental condo that we use three months of the year and rent the other months, sometimes directly and sometimes through a management company located in that resort area. This has been MUCH less hassle than any SFH rental -- but it would still be a losing day-to-day financial proposition (over other investments) if we didn't *use* it.

I've just hooked up with a property manager who let's all tenants know that there will be quarterly inspections of the home's interior for upkeep, maintenance, air filter exchanges... this way all applicants know up front when applying. This fact alone keeps out a lot of tenants that a landlord would not want.

This is a just say no moment. I have been a residential landlord with over 200 houses. I'm currently a commercial real estate landlord. Over 30 years of landlord experience. The vast majority of residential tenants do not take care of their living quarters they way an owner does. I can give you examples of friends and friends of relatives that asked us for advise over the years. I cannot tell you one story where they kept the house and it ended happily.

There were a lot of maybes in one of your posts. That to me says sell. If you want to help your children while they are in college, help them with the rent.

Allison, were you a landlord/property owner of 200 houses or a property manager for 200 houses? I am just wondering........I am guessing you must have been making a lot of money or you won’t be doing it for 30 years. :-) Why haven’t you stopped at the 2nd year and sold all of your properties? What’s the secret to keep you going? I am in the process to collect another rental property with two experienced landlords and realtors help. I am also learning from everyone here. Thanks

We have always owned, managed and leased ourselves - both residential and commercial properties (shopping centers, office buildings, land lease). All but one center we built from the ground up. Currently working towards full-time retirement (2019), but will keep the land lease.

We had the rental houses about 10 years. I would not say "a lot of money." Sold most of them to one person, and the others to several others. We've been in commercial RE over 30 years (some lapping over), so really over 40 years. Time flies....

My advice:

• A good lease.
• Credit checks.
• Never did background checks, but the world is different now.
• References, and call them. Not just personal (friends, no relatives) but professional (employers, boss).
• Trust your gut, if you have a good one. The only tenants we regretted were the ones DH had second thoughts on, but rented anyway. We'd rather sit empty than rent to a bad tenant.
• Do anything and everything you can yourselves.
• Shop around for insurance coverage.
• Have an good Umbrella policy (too many in this world are sue happy).
• Don't become friends with tenants. They'll expect too much/favors.
• Be consistent. If late, charge late fee. Once you forgive, they'll want forgiveness the next time... and the next time.
• We've always told tenants if they were having trouble paying the rent on time or at all to call us. Better to be upfront than hear nothing.

I'm sure there is more, but too many distractions at the moment.

First months, last months and deposit seems to be the norm for higher income residential properties. If someone can come up with that much for lease signing, they shouldn't have immediate money problems. When DD1 rented houses in San Francisco/North Bay, landscape maintenance was included in the monthly rent. At least you know the yard will be maintained.

Allison, thanks for all the tips! :-)

Thanks for the additional comments! I'm going to look at some library books that discuss being a landlord and property management. we'll also run the numbers when tax software comes out.

I do think it's great that you are willing to do some research to see if being a landlord is worth the hassle.

We live in the San Francisco Bay Area. I can say it wasn't worth it for us. Very true that CA is not landlord-friendly. But also, tenants really can put your property through a beating - sometimes with the best of intentions!

In looking over a property after the tenant left, I discovered there had been a leak in the DW. The cabinet next to the DW was destroyed inside. The tenant had fixed the leak themselves, which was sweet of them (altho the DW itself no longer worked), but there we were with a damaged cab smack in the middle of a row of no-longer-made cabs.

I had to take off several times from work due to the cabinet plus having a new DW installed. And of course, the first delivery date got delayed and then canceled, so I had taken the day off for nothing and had to do it all over again with a new delivery date.

There is nothing quite so boring as hanging around an empty apartment, waiting for delivery people to show up. Sigh.

Even if you decide to do the landlord, I would strongly advise you to have at least 6 mos. emergency fund. Three is not enough. Just being empty, having to clean, return the cleaning deposit (CA laws are VERY strict on this, I believe), advertise, run credit checks, etc., easily takes up 3-4 months even in a good rental market.