July Mortgage Update: Renting a house for a year is a pain

This month (July):
Balance:$22,465.56
Years left: 1.6666666667
P =$1,121.04, I =$93.36, Escrow =$809.48

Last month (June):
Balance:$23,586.60
Years left: 1.75
P =$1,116.62, I =$97.78, Escrow =$809.48

One month’s prepayment savings: $0

We put our house on the market for under the market value.  We gave a $200/mo discount on top of that for a family to rent it furnished rather than unfurnished.  We only advertised on the university web-page and on sabbatical homes and the MLS.  No Craigslist!

A family from overseas contacted us right away.  They had their local friends look at it.  We had a brief discussion via the internet wherein the husband tried to bargain us down from the listed unfurnished price, not understanding that we were renting it for less than what he was trying to bargain it down to because he wanted it furnished.  The wife and I discussed daycares and leaving DC2’s outgrown clothing and toys since her child is a year younger and how much cheaper water is in the US than in her country.  We put the husband in contact with our real estate agent.  We hammered out all the details like dates.  The wife contacted the agent with a lengthy list of demands of things she wanted cleaned before they got here (all of which we were planning on doing anyway) and a demand that we get rid of some of our paper blinds which she thought were grey and covered in dust from her friend’s video, but are actually peach and what she thought was dust are shadows from the pleats.  We said no to replacing the blinds.

I got a few more contacts from less desirable prospective tenants (two dogs and a cat kind of less desirable– our HOA only allows two pets, or people needing the house for less time or wanting to bargain us down more), but they didn’t contact me back when I said we were in conversation with another family.

And then nothing for a few weeks.  With the end of the school year etc. we didn’t really notice things weren’t progressing, but once that settled down we wanted to nail things down.  We contacted our real estate agent, who said things were progressing.  And then a week later things stopped progressing.  So the real estate agent sent a firm email noting he’d been turning people away from looking at our house, and that activated some action from our prospective tenants, the irritated full professor noting that he is a very busy man in the middle of organizing a conference.  Which is no doubt true, but he really should have taken care of the lease before the conference!  He sent the background check information and passed the check.  And our agent sent the lease to sign both electronically and in pdf form (in case the electronic version wasn’t working).  And… then nothing.

So then our agent stopped turning other families away from looking at our house which meant we spent some time outside at the playground where it is very very hot.  The first new family to look at the place texted right away and said they loved the place.  They wanted it for the full time and they wanted it unfurnished (so another $4K for an additional 2 months + $1200 to rent unfurnished instead of furnished + the utilities we wouldn’t be paying those two months… but also plus hassle, storage, and potential breakage) and were willing to give us a deposit and signed lease right then and there.  We gave the family we had an agreement with until the weekend was over to get us the signed lease and deposit or we were moving on.  And they did.  So we turned the second family away and took down the sign on our lawn and the listing off sabbaticalhomes.

Hopefully this will all work out!

I do think it helps that we listed the place under market price and that we had two prices for furnished vs. unfurnished that reflected our desire not to move our stuff into storage.  We have more money than ability to deal with hassle these days, and it’s nice being able to just say, screw it, we have the cash for this, we can take a risk or pay to not have to deal with something.  Me five years ago (when DH was still a tenure track professor) would have been freaking out at every point, and we’d have had a higher listing price.  And I can’t even think what me when DH was between jobs would be doing.

Wish us luck!

Have you ever acted as a landlord, temporary or otherwise?

12 Responses to “July Mortgage Update: Renting a house for a year is a pain”

  1. hollyatclubthrifty Says:

    I think it’s a good sign that she wanted dirty blinds taken down (even though they weren’t really dirty). Hopefully that means she will keep your place clean and nice! Glad you found someone!

  2. the frugal ecologist Says:

    I’ve had good luck with short term rentals before (from both sides but never as long as a year). Glad you gave the first guys the boot & hope the new family works out well. Having a real estate agent that can act as a property manager is really nice!

    And hey, moving out your stuff is a pain but also a good chance to get rid of stuff, clean out & will be easier to do any house projects before you move back in. Good luck!

  3. Flavia Says:

    Yup. Did it the year before last, when I was on sabbatical. We had some similar near-misses. (E.g., a new faculty member at another uni, her spouse, and a third person who was allegedly a friend all wanted to rent it as a group. They seemed super nice–and we didn’t care if they were a polyamorous trio or whatever–but their credit history was a disaster and they only had one salary among the three of them and our realtor warned us off.)

    We wound up with what I would originally have considered suboptimal: three male grad students who in the end turned out to be four b/c one had a boyfriend (with one bathroom! Craziness!), but we had absolutely no problems. We rented it furnished and also had our housekeeper go over once a month. They paid our asking rent, which was $200 more than our monthly mortgage, always on time, and there was literally only one minor maintenance problem all year.

    Then we paid our housekeeper to do a THOROUGH cleaning before we moved back in.

  4. Debbie M Says:

    Heh, you could have just let him bargain.

    Sad to hear that house renting (and maybe everything) works the same way as jobs–it’s a lot easier to get people to do what you want once you don’t need them to anymore because someone else will. Arg.

    Yes, I am happy to wish you good luck on these folks being decent tenants!

  5. Lara Says:

    We have had tenants in our house over the past year during my sabbatical. I agree with Flavia that it is a good idea to keep up regular maintenance visits of various kinds. We had our lawn service continue to visit throughout the year for regular mowing and fall clean-up. We also found it helpful to have the number of a handyman for small problems that came up through the year. We worked with our handyman on small fixes leading up to our move so we felt confident of his work even though we are in a different state. Finally, you have to talk to your insurance agent and switch your insurance to the appropriate kind. I’m sure our blog hosts know that, but we had some friends who didn’t know and/or want to mess with it when they rented their house, which could have been a complete disaster.

  6. MutantSupermodel Says:

    That actually doesn’t sound too bad! Glad it is a go and I hope it all works out awesome!

  7. noemi Says:

    We rent an in-law unit below our home (behind our garage) to cover our mortgage. We’ve had two tenant, both found through friends, and they have both been great. We keep the rent REALLY low, only what we need to cover our mortgage, not what we could get in the crazy rental market right now. That alone keeps are renters happy and I think it keeps them from bringing up little issues they make otherwise have. I don’t love being a landlord but it’s how we are able to afford our house and I’m grateful that it was a possibility. When we started renting out place was technically illegal but they’ve since changed the law and we’re looking into what hoops we’ll need to jump to make it kosher. Legalizing it would give us protections but would give our tenant even more protections so there are pros and cons to doing it. We’ll have to figure it out.

    • j Says:

      Wait, so you’re okay with the fact that you illegally rented out a unit, that you keep your rent artificially low so your tenants won’t bring you presumably routine issues that landlords should be responsible for, and you’re worried about your tenants being able to have rights and protections? And you are okay with this?


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