I have been hoping for SOMETHING to happen that would set us on a path. While the house has been on the market, we are just at a crossroads. We can't move forward. We can't move back. We just sit and wait for something to happen. Be careful for what you wish for....or in the least....be careful how you word your wishes....
Renting out the house
Many people over the past months have said to me to "just" rent out the house. "Just" has turned into my least favorite word. Nothing is JUST. There is a much larger picture. Maybe it is a blessing...or a curse...to be able to see the next ten steps in these cases, but it isn't as easy as JUST doing it. All decisions have consequences.
We considered renting out the CT house for August 1. In this scenario, we would be forced to also rent a home in our new location. If we wanted the kids to start school there, August 1 would be the drop dead date to have moved (school starts 2 weeks later). They would only have one year at their new school, and then they will be in high school. Bossy has his "triennial" testing due (by law, the school has to test Special Education students every 3 years....and it is a huge ordeal), and this will determine how we structure his high school program. So it is important that we stay in the same district.
This leads us to a very narrow area to look at. And in that area, rentals are not plentiful. We have been looking. It isn't even the cost....there just aren't many rentals. Additionally, we have no idea how long we would be there....hopefully only a year. But depending on what happened here, it could be longer. Also, the owners of that house could be trying to sell as well, and may decide to not renew a lease. This would require another move, and if we are trying to stay in the same area, once again our options would be very limited. So this whole scenario is very up in the air.
But back to renting out our house here....
Being 800 miles away, we would not be able to monitor the house. If a faucet leaked, we couldn't come over and fix it. And if the house was on the market....we would be at the mercy of the tenants. None of these things are good. So we contacted property management companies to find out how their services worked.
Basically, they get paid a "finders fee" of one month rent (we could get around this by going through our realtor to find a tenant, but then the management company is absolved of any "bad tenant" issues since they were not part of the vetting process). Then they would charge us about $150 per month for their services, and realistically for most months...all they would do is collect rent, take their share, and then forward the remainder. They would really "earn" their money if something went wrong with the house. We would also have to keep $500 in a "maintenance" account to draw from for basic repairs. (If the tenant turned out to be a pain, this account could disappear fast). A major repair (such as the furnace dying)....then they would charge us 5% above the cost of the repair to put it on a CC, or we could forfeit our rent money until the repair was paid for. (In this scenario, we would then be covering the mortgage on the house until the repair was done, in addition to the monthly rent we would be paying for the house we were living in).
Additionally, we would still have the pool to deal with. They would not assume any liability of the pool (which we figured). They also treat the pool the same as you would if you were renting an apartment that had pool facilities....AKA the landlords are responsible for the day to day upkeep of the pool. That would require hiring a pool company who would charge about $600 for opening and closing the pool, and another $1200-$2400 to maintain the pool (depending if we went with weekly or bi-weekly service).
We didn't even get to the insurance portion of it....because our insurance would also change. Some people told us it would go down, since it wouldn't be an owner-occupied dwelling. Some said it would go up because of the liability of the pool.
PLUS, if we tried to sell the house toward the end of the lease, the management company would not ask the tenants to deal with showing and such (the promise of quiet and peaceful living), so we would have to wait for them to be out, then show the house empty, and assume the monthly cost of the house until it sold, or then have to get another tenant. We were also told that most people won't want a 1-year only lease (because "you know, it is expensive and time consuming to move"....gee, really??? I didn't know that.....) And if all of that wasn't already rainbows and sunshine....we were also told that many people who know that a lease is only for a year may stop paying rent toward the end because they know that an eviction process takes time, and they will be gone anyway. We would then have to chase after them for the back rent, and in most cases it is such a hassle that people give up, and if they do pursue it...it is questionable if we ever would really see the money.
We did not talk about lease to own, because we were already at a point where we were beyond a financial point that we could handle. The average rent for our type of house would just about cover our mortgage, but then we would be kicking in $150 a month to the management company, and almost $2000 (which would be all paid in a 3-4 month time frame) for the pool (probably more, because the water bill would come after a tenant would leave, and we would end up responsible for that).
So we made the very hard decision that the kids and I would stay in CT until the house sold. We can always re-evaluate as we go, but for now, we will continue to live our separate CT/NC lives. We are having to change our game plan for the kids, since now we will probably be here for the summer and into the fall .
Unless something changes with the house....wait.....something has changed with the house. Stay tuned.
This all makes my head spin! I pray it all works out for you in the end. Hugs.
ReplyDeleteIt's making my head spin too....and there is soooo much more to tell!
DeleteGuess you could always leave the gas on and the house accidentally burns down? Lol j/k crime never pays!! Can you lower the price a bit more?
ReplyDeleteWe don't even have gas! Lol. But we dropped the price last week again.
DeleteI think renting it our seems like a bad idea. I think that selling for even a loss would be a better idea. Could you get an unsecured loan with your bank to cover the difference?
ReplyDeleteI was never a fan of the renting it out idea, but I at least has to research it before we said no.
DeleteNo idea on the loan for the difference but we have to be careful taking on more debt. We aren't even at a point of dealing with a down payment for a new house....so we are just kinda screwed. And as I said....there is more to the story.
I am so sorry it has come to this, I have no advice other than know we are here when you want to vent etc.
ReplyDeleteThanks.
DeleteWe rented out a condo we owned while we lived 20 min. away in a smaller apartment for a year or so...and even that was something we thought we didn't want to do again. Our tenant was divorced, paying alimony, had a gf who was pregnant and he never paid on time (we were pretty nice landlords now that I look back) and when we finally moved back in due to his wanting to pay even less rent--and we said no--we found damages like holes in the wall, his dog had gnawed on the stair railing, etc. It's a different matter when you set out to have a real rental property and are prepared for it, but when it's your home AND you can't even be there to monitor it...no one can blame you for NOT wanting to do that. Yes...I hate it when people say "just" like it's as easy as snapping your fingers....
ReplyDeleteThanks for sharing your experience. I am sorry it wasn't positive....but it shows that being a landlord is not easy even when you are local.
DeleteThink my comment got lost in cyber space. I have heard horror stories from people who rented out properties. The chance of being sued alone would be enough to scare me off. I would stay put, lower the price and wait it out.
ReplyDeleteWe have lowered the price twice. The house around the corner sold for just under what we are asking. No one seems to know why it isn't selling. All we hear is that the 3rd bedroom is small....which we can't do anything about.
DeleteWe had rental property for a number of years and it was never a good experience. Twice we rented our own house, my husband was in the Army and we were going overseas, and again, it wasn't good, sometimes ok, but never great. Hold out for selling.
ReplyDeleteI am sorry your house hasn't sold, but I think you need to stick it out just to many unknowns the other way. I know it is so hard and I wish I had a magic wand to make that house sell.
ReplyDeleteThat teaser at the end was dirty! I'm over here on the edge of my seat!
ReplyDeleteBefore I got down there, I was gonna suggest that you take the pool down to avoid all that hassle.
Hee hee...see, now you have to come back to see what happened! Lol
DeleteHey, was that an edit? Something happening with the house? I really hope it sells. You've been through enough of the living-in-two-states business.
ReplyDeleteNope not an edit. ..just a teaser. And no...it hasn't sold.
DeleteTrust me- you NEVER want to do a lease or rent to own- 9 times out of 10 it never works out. Experience: real estate paralegal. :) That said, I can certainly understand why you want/need to sell your home. I'm sorry you are having such a hard time. Coming from a person that rents a home (military family) I definitely do appreciate people that do rent out their homes. My husband and I treat our rental home like it is ours, and by that, I mean with respect for the owner's house-as people should.
ReplyDelete