Would You Ever Rent Out Your House?
As we know, the folks who are really suffering these days are those with adjustable loans soaring way past what they can afford. But how about the folks who can pay their mortgages but just saw tens of thousands of dollars in equity evaporate, and either want to live elsewhere or have to move for a new job?
Well, what about renting your house out? Have any of you ever considered that option? The downside: Allowing people you don’t know access to your one single biggest asset, making it possible for them to flood the basement, destroy the Wedgewood stove or refuse to pay rent for six months. The upside: You don’t have to sell at a loss and can still move to a nicer neighborhood or relocate if a cool job beckons.
Would any of you ever do it? Have you ever done it? If you did, how would you go about protecting yourself from catastrophic outcomes? (Photo: Karlina on flickr.)
R.J. Lum said:
Yes. I sure would. The key word is “vetting,” and there’s lots of help available for screening potential renters. I would be more likely to rent to folks I knew through professional channels than to people with whom I do not share any link. Having said that, it is important to be realistic about the responsibilities of being a landlord.
August 5, 2008 4:27 PM
Janis Mara said:
Thanks, good points, RJL! I am actually thinking about doing this myself, but it scares me. Maybe the best policy is to rent to people you know AND ask to see their credit report … what do you think?
August 5, 2008 4:40 PM
Red said:
Before you rent to anyone, and particularly someone you know:
Get a credit report and references; work, previous landlords – and check them.
Deposits are first, last, and big damage deposit.
Written rental agreement, with penalty for late payments. Strictly Business when it comes to your investment.
Friends and Family can be the worst tenants, they often believe that you should take care of them if there is some little problem they are having.
Have I experience? um, yeah, brother in law…
August 6, 2008 1:36 PM
Janis Mara said:
Oh! Many thanks, Red! Hmmmm … I am rethinking that idea of renting to people I know. You have a point; I see what you mean about thinking you should take care of them. Might be best to stick to people I don’t know. For example, embarrassing and awkward to ask colleagues or friends for previous landlord references and credit reports, I’m thinking – whereas with a stranger, no biggie.
Huge damage deposit – YES! Seems like that would either (a) make it less likely the tenants would trash the place, (b) soften the blow if they do.
Thanks!
August 6, 2008 5:19 PM