Author Topic: Renting out your old house vs. selling (Read 8135 times)

XocolateThundarr · « **on:** July 02, 2014, 08:23:03 AM »

Within the next year my plan is to get out of the house we are in now and upgrading to a larger house. Kids are getting bigger and we have outgrown our current space. I am struggling with whether it would be better to just rent out our current house and let someone else build more equity for me or if I should just sell the damn thing and move one. Do any of you guys have any experience with this? If I rent it, should I go with a real estate management company or should I just handle it myself? Also, if this has been discussed in another thread please point me in that direction. I did a search and didn't come up with anything.

Emo EMAW · « **Reply #1 on:** July 02, 2014, 08:27:49 AM »

Where is your old/current house?

XocolateThundarr · « **Reply #2 on:** July 02, 2014, 08:42:23 AM »

Kechi, KS.

Emo EMAW · « **Reply #3 on:** July 02, 2014, 08:45:27 AM »

I'm gonna go with the old rule of if I haven't heard of that place you should probably just sell it. Anyway I think Katkid did make a thread for this stuff but I'm not sure where it is.

Mrs. Gooch · « **Reply #4 on:** July 02, 2014, 08:47:12 AM »

Here was Kat Kid's discussion about buying a house to rent...which is a bit different than your situation but some of the advice still applies.

http://goEMAW.com/forum/index.php?topic=27413.msg1132475#msg1132475

XocolateThundarr · « **Reply #5 on:** July 02, 2014, 08:52:45 AM »

Quote from: Emo EMAW on July 02, 2014, 08:45:27 AM

I'm gonna go with the old rule of if I haven't heard of that place you should probably just sell it. Anyway I think Katkid did make a thread for this stuff but I'm not sure where it is.

It's Wichita....but I am going to read what KK was talking about in the other thread.

HerrSonntag · « **Reply #6 on:** July 02, 2014, 09:08:28 AM »

Kechi is still a little bit too far out in the boons for most renters... though that might be a good thing, the kind of renters you don't want are also the kind of renters that don't want to live out in the country.

Figure out the going rental rate for similar properties and add 10%, again, to make sure you get renters that aren't going to be trouble.

Rentals aren't free money, its a lot more work than you'd expect. Don't even have the expectation of making money... you're always one bad tenant or one disaster away from losing your shirt. Really, if you don't already have experience in the renal market or some background in home remodeling, I wouldn't bother, unless you have some emotional attachment to the house and just want to keep it around.

XocolateThundarr · « **Reply #7 on:** July 02, 2014, 09:13:56 AM »

No emotional attachment here. I know there are a couple of property management places here in Wichita. I think I am going to speak with them to see what their fees are and whether it would make sense to utilize their services. Basically, if I can get the mortgage, insurance, upkeep, and possible management fees paid for I would be happy.

michigancat · « **Reply #8 on:** July 02, 2014, 10:56:41 AM »

06wildcat · « **Reply #9 on:** July 02, 2014, 12:43:26 PM »

Quote from: XocolateThundarr on July 02, 2014, 09:13:56 AM

No emotional attachment here. I know there are a couple of property management places here in Wichita. I think I am going to speak with them to see what their fees are and whether it would make sense to utilize their services. Basically, if I can get the mortgage, insurance, upkeep, and possible management fees paid for I would be happy.

If you're going this route, ask for references. Look up any local landlord associations and contact them as well. If they're in Wichita, do some searching on the Internet to see what their reviews are like (take the majority of them with a grain of salt.)

They should be able to give you a fairly accurate estimate of high/low rental value and explain what each price will mean in terms of tenants, vacancy etc. The maximum fee should be 10 percent of gross rent. Some have a handyman on staff that can save quite a bit of time and money over doing it yourself. All will have relationships with qualified contractors at reduced rates.

Also, be aware that the bank will probably want to see a cash reserve of about six months to cover BOTH mortgages if you're purchasing another property. Ideally you would have a year's worth of rental revenue on hand in case something major happens.

If you've been in your current place for a decent amount of time and haven't refinanced etc., you want to do that at least 3 months before you make an offer on your new primary residence.

wetwillie · « **Reply #10 on:** July 02, 2014, 12:44:12 PM »

sell it yourself too

michigancat · « **Reply #11 on:** July 02, 2014, 02:16:22 PM »

Also, I think you're just as likely to have piece of crap tenants in Kechi as you would in a more urban location.

Benja · « **Reply #12 on:** July 02, 2014, 02:17:35 PM »

Quote from: michigancat on July 02, 2014, 02:16:22 PM

Also, I think you're just as likely to have piece of crap tenants in Kechi as you would in a more urban location.

as a general rule, all your tenants are pieces of crap when you're a landlord

Emo EMAW · « **Reply #13 on:** July 02, 2014, 02:21:34 PM »

The biggest and most important variable (outside of your control) is the likelihood of the property appreciating over time. If Kechi isn't setup for a boom then seriously consider selling it.

06wildcat · « **Reply #14 on:** July 02, 2014, 02:29:42 PM »

Quote from: Benja on July 02, 2014, 02:17:35 PM

Quote from: michigancat on July 02, 2014, 02:16:22 PM
Also, I think you're just as likely to have piece of crap tenants in Kechi as you would in a more urban location.

as a general rule, all your tenants are pieces of crap when you're a landlord

Confirmed.

Dugout DickStone · « **Reply #15 on:** July 02, 2014, 02:30:31 PM »

Renting out your old place is for huge studs with great arms only, so ask yourself if that applies to you.

TheHamburglar · « **Reply #16 on:** July 02, 2014, 07:47:48 PM »

How much will you make in equity per month? I kept my old house to rent out and ended up with the best renter in the world. Might be worth it to try for a year and see if you get lucky. You can always sell after 1-2 years and not pay taxes on the gain. It's not a huge commitment to keep it for a year then sell if you don't like it.

Johnny Wichita · « **Reply #17 on:** July 03, 2014, 09:16:27 AM »

Quote from: XocolateThundarr on July 02, 2014, 09:13:56 AM

No emotional attachment here. I know there are a couple of property management places here in Wichita. I think I am going to speak with them to see what their fees are and whether it would make sense to utilize their services. Basically, if I can get the mortgage, insurance, upkeep, and possible management fees paid for I would be happy.

Sounds like a beautiful Thursday afternoon bar discussion topic.

XocolateThundarr · « **Reply #18 on:** July 03, 2014, 09:22:45 AM »

Quote from: Johnny Wichita on July 03, 2014, 09:16:27 AM

Quote from: XocolateThundarr on July 02, 2014, 09:13:56 AM
No emotional attachment here. I know there are a couple of property management places here in Wichita. I think I am going to speak with them to see what their fees are and whether it would make sense to utilize their services. Basically, if I can get the mortgage, insurance, upkeep, and possible management fees paid for I would be happy.

Sounds like a beautiful Thursday afternoon bar discussion topic.

Gooch · « **Reply #19 on:** July 03, 2014, 09:27:57 AM »

Quote from: Johnny Wichita on July 03, 2014, 09:16:27 AM

Quote from: XocolateThundarr on July 02, 2014, 09:13:56 AM
No emotional attachment here. I know there are a couple of property management places here in Wichita. I think I am going to speak with them to see what their fees are and whether it would make sense to utilize their services. Basically, if I can get the mortgage, insurance, upkeep, and possible management fees paid for I would be happy.

Sounds like a beautiful Thursday afternoon bar discussion topic.

Yes. I was wondering if we should rent too in the future. Our house would be perfect for renting out. Lets discuss.

Dugout DickStone · « **Reply #20 on:** July 03, 2014, 09:29:12 AM »

You gotta ask yourself, are you a big enough boss to own multiple homes?

Mrs. Gooch · « **Reply #21 on:** July 03, 2014, 09:32:50 AM »

Quote from: Gooch on July 03, 2014, 09:27:57 AM

Quote from: Johnny Wichita on July 03, 2014, 09:16:27 AM
Quote from: XocolateThundarr on July 02, 2014, 09:13:56 AM
No emotional attachment here. I know there are a couple of property management places here in Wichita. I think I am going to speak with them to see what their fees are and whether it would make sense to utilize their services. Basically, if I can get the mortgage, insurance, upkeep, and possible management fees paid for I would be happy.

Sounds like a beautiful Thursday afternoon bar discussion topic.
Yes. I was wondering if we should rent too in the future. Our house would be perfect for renting out. Lets discuss.

We'd have to have a property management company.

XocolateThundarr · « **Reply #22 on:** July 03, 2014, 09:37:04 AM »

Quote from: Gooch on July 03, 2014, 09:27:57 AM

Quote from: Johnny Wichita on July 03, 2014, 09:16:27 AM
Quote from: XocolateThundarr on July 02, 2014, 09:13:56 AM
No emotional attachment here. I know there are a couple of property management places here in Wichita. I think I am going to speak with them to see what their fees are and whether it would make sense to utilize their services. Basically, if I can get the mortgage, insurance, upkeep, and possible management fees paid for I would be happy.

Sounds like a beautiful Thursday afternoon bar discussion topic.
Yes. I was wondering if we should rent too in the future. Our house would be perfect for renting out. Lets discuss.

Lunch at Wichita Brewing Company?

Dugout DickStone · « **Reply #23 on:** July 03, 2014, 11:38:05 AM »

Are you ready to get unlimited pool HJs when girls hear you own 2 homes?

ChiComCat · « **Reply #24 on:** July 03, 2014, 04:03:33 PM »

If you are staying close to the property, the real estate/management company will probably be a huge waste. I can't imagine the real estate market in Kechi is booming, so I would sell if given the opportunity. May be a while until you see another buyer. I would only rent if I could be close enough to check up on the property. I know a landlord by me that has something in the lease of being allowed to walk the property once every 30 days with x amount of notice. Maybe nice if you rent to pieces of crap.