Renting out our house is a PITA

We’re in a seller’s market right now, so the realtor says he could sell our house in a month, which is probably true.  But then when we came back in a year we’d have to *buy* a house and I seriously doubt it will be a buyers market at that point.   So yes, we could take this opportunity to downsize and to move into a better elementary district, but all the time spent buying and selling and buying (or renting and buying) sounds like a nightmare to me.  So we’re just going to try to rent out the house.

The real estate agent thinks we can get $2,800/mo for our house but I seriously doubt that’s the case.  The comps he was showing are in better elementary school zones and the houses probably aren’t falling apart quite to the extent that ours currently is.  They have nicer lawns too. And it’s unlikely they’re one year rentals, which is always bad for people who want, you know, longer than a year.  Also we’re not supposed to rent to students, though we’re fairly sure someone on our block is now doing just that (6 cars in front is generally a hint).

Covering our costs if we put things in storage will be $2,200 + management fees.  Of course, about $1000 of our mortgage goes to principal these days so really we’d be covering costs with more like $1,200 + management fees.

Craigslist is no help on pricing because nobody with a house as nice as ours posts on Craigslist in our town, so Craigslist rentals tend to top out at $1650 or occasionally $2000 for houses that have the same number of bedrooms as ours but are more in the 2000 sq ft range vs 3000.  Houses like ours are all listed via MLS.

Fortunately, so long as we keep under $5K/mo in Paradise City, we don’t need to actually rent out the house at all and could even hire someone to house-sit for us.  So we’re not desperate for rentals to go through.  But still, I’d rather ask $2,200 and have the house get rented than ask $2,800 and have to keep in on the market until September or forever.

We are listed on sabbatical homes and on the university housing available webpage, but no pictures yet (other than an old one of the outside) because our house is a mess and we haven’t had a chance to take pictures.  Nobody has contacted us to ask any questions.

I’m tempted just to wait until the summer and we’ve figured out where we’re going in Paradise City.  Then ship what we’re going to ship and store what we’re going to store, and then list the place.  I suppose in the worst case scenario, the management company can keep it furnished and then rent it out for huge amounts of money on gameday weekends.

On top of that, DH or I are traveling all month and we’re only seeing each other a few days.  And I’m behind on a ton of work.  So in reality, nothing is going to happen until May because nothing can happen until May.  I suppose that will save us money and aggravation on trying to keep the house “show-ready” which is nearly impossible with a 2 year old in residence, even if we do hire a regular house cleaner.  (We couldn’t even keep the house clean for the most recent in-laws visit!)

Have you ever tried to rent out a home?  Any tips for short term rentals?

21 Responses to “Renting out our house is a PITA”

  1. Well Heeled Blog Says:

    Looking at my parents’ landlording experience, pricing slightly under market and hiring a management company are the 2 best ways to get your place rented fast with the least amount of headache. Also, find a stable tenant.. You don’t want to deal with a broken lease or a non-paying tenant. Good luck. Just think.. Paradise awaits!

  2. Practical Parsimony Says:

    We rented a house we were selling in order for the renter/buyer to get his VA loan approved. Because we were never coming back, the agent turned against us and started working for the renter/buyers. He tried to get us to come down on the rent which was already below the mtg payment. This lowering of the rent occurred when my spineless ex caved. The agent talked to my ex and mailed us a new contract where we would take less money for the sale. I just refused to sign. My husband said the agent was abusive as he tried make my husband sign, just like my husband agreed to do. However, I had not agreed, so my ex was in a bind (in his own eyes). In the end my refusal saved us money.

    There were two problems, husband thought I should do as he said. Since he always made poor financial decisions, we had problems. Plus, the agent stopped working for us.

    I know this is entirely unlike your problem in most ways. I would rather let my house sit empty except for someone coming by to flush commodes and run dishwasher than have someone using it without my constant, in town presence. No one will care for your home like you do. If it has problems now, someone who is rough on houses might exacerbate the problems with their habits. What if a minor problem becomes a major problem? This question would lead me to nightmares.

  3. Holly@ClubThrifty Says:

    We price our rentals under market, but for a different reason. We want people to stay for the long-term and not raising their rent every year improves that chance. Obviously you are only going for a one year rental, so that reasoning doesn’t work well. Still, you will probably attract more people and have more potential renters to choose from if you charge less. It would be nice to receive several applications at the $2,200 rate vs. one application at $2,800 and feeling obligated to rent to that person.

  4. Thisbe Says:

    I kind of wanted to rent the house I just moved out of – the partner was willing to go along with that if we could easily find an amazing tenant. I know a lot of people in that town, the house is nice and in a great neighborhood, and we would have allowed pets with no hassle. But we had no takers, even at a price that would have been slightly cash-flow-negative (and a terrible investment in the long term) – I think the problem is that there are an awful lot of cheap, low-quality rentals in town and the economy is difficult. And no way were we going to list it on craigslist and rent to someone we didn’t know.

    In general I’m not that sorry. It would have been a bad decision to keep it and let it be trashed by renters, and probably a lot more hassle in the long run.

    It’s on the market right now. I’ve done the thing where I live in a house and keep it staged and try to sell before moving out, and I just couldn’t deal with it. My agent listed it the day I left town. It hasn’t sold yet, but I imagine it will. Like I said, the location is really good.

    Both sets of my parents rented out homes while they lived abroad. Both had bad experiences with that situation, enough so that both of them ended up just leaving the houses empty for a year or so at the end so at least the damage would stop happening.

    This might be in the category of “irritating advice that is not welcome”, so feel free to ignore – but are you SURE you don’t want to sell? I get the impression that you don’t like your house that much. You’re moving out of it for a year that you’re going to spend somewhere you like a lot more. If it were me, I would be worried that in a year the idea of moving back into the house I don’t like would be super unappealing. Especially after it has been potentially trashed by renters.

    • nicoleandmaggie Says:

      No, we like the house, it’s just bigger than we need by about 800 sq feet. There are a bunch of things that need fixing, but after ~10 years that’s true with any house– that’s just the problem of home-ownership. Also the kitchen sucks, but eventually we’ll get around to renovating it, just like we finally go around to removing the carpet in the bathrooms.

      We love the screened in patio and the distance to the pool and park. Those would be difficult to duplicate. Our neighborhood also has sidewalks which is pretty rare around here. It is true that the elementary zone has changed to a much worse one, but DC2 may end up going to private school for K-4 anyway. There’s not much to walk to, but that’s true of pretty much any part of town that isn’t over-run with student housing (and walking to say, Schlotzki’s, really isn’t high on our priority list). So it’s really more the part of the country than the house.

  5. Comradde PhysioProffe Says:

    “rent it out for huge amounts of money on gameday weekends.”

    Nooooooooooooo. The drunken football fans will trash the place.

  6. Linda Says:

    Are there any large hospitals in the area? Especially teaching hospitals? Or maybe a teaching hospital is affiliated with your university? Medical students doing their residency need places to stay (and maybe wouldn’t be considered “students” in the same way by your HOA.)

    When I was renting out a big room and private bath in my Chicago house through Airbnb I got a a good number of people who were in town because of seminars, training or testing for medical credentials, and other professional reasons. “Renting” in this way would mean keeping the house furnished and would require some higher upkeep from a management company that can deal with short term rentals, but it would provide some income (or maybe just a business loss that can have some not terrible tax implications.)

    I also wouldn’t assume that football fans would trash a house. If football is a big alumni thing at your university, it would also attract responsible people who travel to the games for social and networking reasons, not just drunken louts. I knew people in South Bend, IN would talked about renting their houses to people in town for Notre Dame games, for example; the people renting were often successful professionals who traveled back for the games because they liked to see college friends, etc.

    Zillow and Realtor.com are places that list houses for rent. Maybe that’s connected to the MLS system, you mentioned.

    Good luck!

    • nicoleandmaggie Says:

      I hadn’t thought of zillow but you’re right. Looking at zillow, I note that all that re-org they did the last time they screwed with the elementary school zones has lowered the scores of all but the top two schools, and now instead of my elementary zone being second worst and “meh”, it’s the worst and close to failing. And the quality of the zone we were in before has also dropped a couple of points, probably because they really did destroy the strong volunteering ties with the few high SES neighborhoods (like mine) in the area. Makes it difficult to attract families willing to pay for 3000 sq feet who want 4br. *sigh*

      No, no med school, no teaching hospitals. There’s nothing here but the university. Probably not unlike South Bend, though I’ve never been to SB.

      The HOA doesn’t care about “students”– the rule is about unrelated people. No two unrelated people are allowed to live together, which is harsher than most of the HOA in the area that allow two unrelated people. (Though I suspect our HOA is currently weak and not enforcing the rule.)

    • nicoleandmaggie Says:

      Zillow thinks we’re still in the school zone from several years ago. We’re not.

      • Linda Says:

        Yeah, Zillow can reflect inaccuracies for some reason. For the entire time I lived in my house (13+ years) Zillow noted it as a single-story house with no garage, even though it was two-stories and clearly had a garage You could even see the garage in the accompanying satellite photo! Since that was exactly how the county described my house in their tax database, I assumed that was why Zillow had it listed that way. It didn’t have any impact on my home sale, though. Maybe if you list the house for rent through MLS and list the school zone it will update on Zillow. I think that it only gets updated when public records (such as county tax records and home sales databases) are updated.

      • nicoleandmaggie Says:

        There are several homes for rent in my neighborhood (though none quite as nice) on zillow and they’re all listed as being in the slightly better school zone. So I don’t think me doing anything with MLS will change anything. The houses in my neighborhood on zillow listed as rentals top out at $2,200, though they’re not as big as our place.

        I sure hope the school zones in Paradise City are listed accurately on Zillow because that would waste a ton of time.

      • Leah Says:

        I think you can send a record update into Zillow. Ask the PoPs — I remember reading about this on their page.

      • nicoleandmaggie Says:

        It’s easy to update inaccuracies in the building– you just click a button. Not so easy to update incorrect schooling district info. Also the zones are changing again this August! Because our local planners don’t understand public finance!

  7. middle_class Says:

    I would imagine it’s harder to find a good tenant who only wants a 1-year lease. If you can’t find someone who is on sabbatical, I would vote “no” to renting the house. Too much PITA as you said.

    • nicoleandmaggie Says:

      There’s also people who had to sell their house while they’re waiting for their new house to get built. But still, it’s 24K/year in rent (minus costs/taxes! plus utilities!).

  8. Happy Says:

    In our small university town, we also have a tight (e.g. seller’s) market. There is a high demand for 6-12 month, semi-furnished rentals for families of new hires as they house hunt. Most people want to leave their bulky furniture in storage but need a family rental for small children as they get the lay of the land before committing to buying which, in this market, takes more than a couple of months. Perhaps getting in touch with growing those who do university recruiting could point you in the right direction.

    • nicoleandmaggie Says:

      We’re listed on that page. So far no bites. :(

      • Thisbe Says:

        Have you thought about whether you would rather
        a) rent the house on a 9-month or 12-month lease to house-hunting faculty at a very low rent (ie., half or three-quarters market rent)
        or
        b) leave it empty
        ?

        We did once rent out a house to a friend for three months at approximately half of market rent. We figured, we definitely were not interested in being landlords for strangers; getting some money, having the utilities paid, and having someone in the house while we waited for the appropriate time to put it on the market were better than not having those things.

      • nicoleandmaggie Says:

        Currently it’s listed at 3/4 rent on the faculty housing website but no hits. We’ll worry about that more as we get closer to summer.

        we can afford to leave it empty, but would prefer someone housesitting (a reliable student, for example). One of my colleagues had a pipe burst while her house was empty and it took the neighbors a while to notice.

  9. Cloud Says:

    Your housing conundrum is the sort of thing that makes me antsy… you are staying so much calmer than I would! I hope it sorts out soon.

    • nicoleandmaggie Says:

      Oh, I dunno. I’ll probably be calm about this end until August, give or take. The other end (renting) is what’s causing me angst right now. But I have to get some time to write that post.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: