Thoughts on being a landlord

[spencer60]

So, I'll be moving later this year, but my current home (a townhouse) has a pre-pandemic mortgage rate (<3%) and is in nice neighborhood, so I was thinking of renting it out rather than selling it outright. Not Air-BnB or anything, just a traditional year-at-a-time lease.

The house is in good shape, the grounds are maintained by the HOA, and I have contractors I can call for any mechanical issues so it shouldn't be a big management hassle.

My main question was whether I should create an LLC for it. I'd hate to have a tenant fall down the stairs and sue me personally, although I guess the lawyer costs would come out of me either way. Does an LLC make sense for a single rental property?

Also, any other thoughts on being a landlord would be appreciated.

 

[Cadcom]

Huge pain in the ass. Most renters don't care about the property and everytime they move, you may as well plan on replacing the carpet, sheet rock and door damage and repaint every thing and possibly replace damaged appliances. My family had a total of 4 rental homes at one time. I had to run lead on more than one eviction which eats up tons of your time and then the cleanup and repair to get the property rentable again just wasn't worth the effort. Finding someone who wants to rent to own and can put something down and then you take a predetermined amount of their monthly rent to apply to a downpayment escrow account was the best thing we ever did. Those folks had skin in the game. We actually made a little extra income for a few years and then sold to the renter/buyer and never looked back.

 

[MJH661]

I have been in the rental business for 34 years. Some random thoughts I have found true over the years:

Never rent a property you have a personal attachment to. ( personal house ) You will get your feelings hurt.

Most tenants will not take care of your property as you would. Some will destroy it.

One property will drive you crazy and financially break you.

Ten properties will make you a living.

Some of the best tenants have bad credit. ( use your intuition on that one )

It’s like having an irresponsible child to look after with each tenant.

Property management is easy, tenant management is a challenge.

And to answer your question, YES! Put it in an LLC with extra insurance and an umbrella policy.

Just my thoughts, worth every penny you paid for it.

 

[letusbuyyourcar]

My landlord has at least a dozen properties of his own and manages probably a dozen more. He told me a long time ago that one or two rental properties will run you crazy and broke. So basically you have to acquire enough of them for the group of them to absorb whatever losses/damages will inevitably occur at any one of them. And that requires a LOT of financial discipline and strategy.
I have cleaned out several of his properties and painted some of them more than once. Of course the conditions varied wildly and some of them were absolutely disgusting. As in like food left on the stove for over a month. Appliances needlessly destroyed, a litter of dead kittens in a closet etc.
So obviously I would not do it or advise anyone to do it. MAYBE...if you had close family members that were willing to rent it that MIGHT be okay. Or it might go bad and cause family problems. It's always a dice roll .

 

[MJH661]

My landlord has at least a dozen properties of his own and manages probably a dozen more. He told me a long time ago that one or two rental properties will run you crazy and broke. So basically you have to acquire enough of them for the group of them to absorb whatever losses/damages will inevitably occur at any one of them. And that requires a LOT of financial discipline and strategy.
I have cleaned out several of his properties and painted some of them more than once. Of course the conditions varied wildly and some of them were absolutely disgusting. As in like food left on the stove for over a month. Appliances needlessly destroyed, a litter of dead kittens in a closet etc.
So obviously I would not do it or advise anyone to do it. MAYBE...if you had close family members that were willing to rent it that MIGHT be okay. Or it might go bad and cause family problems. It's always a dice roll .

I agree.

 

[MrJim]

Been there. Done that. Never again.

 

[lostchild]

It only takes occupancy by one PWT family to cost you years of rental in repairs.
Screen tenants carefully.

 

[thevalueman]

Been there. Done that. Never again.

what he said!!!

 

[kodis556]

That property will never be worth more than it is today, in all likelihood. Take the money and run as far and as fast as you can away from being a landlord.

 

[Wile E. Coyote 5.0]

Nope. Sell it and save yourself years and $thousands in misery and blood pressure medication