Hard to be a landlord in a different state.

LTG : )

It’s hard to be a landlord in the same state even.

Sell it or work with a company to manage it for Air BNB. Been renting out my first house because I was under water and the market wouldn’t allow me to sell for what I owe on the mortgage. 4 different families. 4 entire renovations. Nothing but stress, destruction, and expenses. Wouldn’t recommend renting to my worst enemy.

I know there are people that are successful but you need a lot in your favor. Seems the positive stories are outliers in just renting out one single family home. I’m not talking about people that own 20 places and apartment complexes.

We have a 7 BR beach house on airbnb in Destin that does well, my wife self manages remotely here in TN. We also have a local one as well that my wife handles. I think you'd probably do well with it but would need a reliable cleaning agency (that's big). The renter pays the cleaning fee on top of the nightly fee. You could search airbnb for similar size houses in the area to see what it would bring. I would do that before I would do a long term tenant in the area you describe would be much more profitable.

Keep it and rent it out. If you do not wish to deal with management-have a management company do it for a fee. Add the fee to the overall rent that you would like to get. Most millionaires have at least five streams of revenue coming in.

Huh, now I’m wondering how come I’m not a millionaire?

Hard to be a landlord, period.

About 10 years ago a girl I worked with was going to sell her house because she was getting married. It was a small place, maybe 900sq, on a slab, no basement, but she owned it free and clear. In 2010, in her area, she coulda got about $50k for it. I told her she could sell it, and have that 50k once, or rent it out for $1000.00/month and get 50k every 5 years (deducting a couple grand a year for taxes/ins/expenses).

She ended up keeping it, renting it out, and her and her new hubby have now flipped 3 or 4 houses themselves.

A house that's paid off is a cash register. Being out of state, you'd obviously have to use a maintenance service. Worst case scenario, rent it out for a year or two, if it's too big a hassle, sell it.

My wife and I are looking to move someplace with a pole barn. If we do we'll rent out our current house (been here 5 years) rather than selling, because we may move back here when we downsize (like that'll ever happen). We can renovate before we move back in and write that off as rental expenses. Incidentally, that's how we got our other 2 rentals, we used to live there, moved, and have rented them for 6 and 10 years respectively.

Above post says it all. Paid in clear= cash register.
Rent it and forget it.

Till you get that midnight call that they plugged up the toilet again, and that the living area is now a lake.

If you truly don’t want the hassle of being a landlord, sell it and take the $500K capital gains tax exemption.

Management company normally gets 100% of the first month, then 8% a month after that.

Sell it and invest in the stock market. No renters or hurricanes to have to deal with.

Long term rent with a property manager. That will be lower maintenance than short term renting where you have to constantly manage. Be super picky on renter. Do credit check, background check, references, the works. Don’t be the nice guy and rent to someone who doesn’t cut the mustard but has a sympathetic story. By the way I’ve hired four property managers and none have ever asked for first months rent. That sounds steep. The 8% figure sounds about right tho.

Advice threads like these are tough because no one fully understands your situation (how badly you need/want the cash flow/tax consequences of converting your house to a rental property/etc). Also determining whether you want cash in hand today versus cash flow in the future is other context we do not have. Make sure you consult your accountant FIRST before you rent out because you can't undo something like that from a tax perspective. Be aware the the sale of your primary home versus a home for income purposes has different consequences that need to be considered by you or your professional.

If you want to keep the house because you like it / have attachment and think you will one day go back to it that influences your decision. If you never plan to move back and just can't bring yourself to sell it that also influences your decision. If it is a pure cash flow move that is fine as well but a *completely* different analysis.

As for anecdotal renting comments--

Life is short and I never want to deal with a rental property again personally. For some years I rented my condo out hoping the value would increase over time and then eventually I sold it just to avoid aggravation. I had top notch tenants and the condo association did a lot of the work on exterior matters but it still was work for me. When an appliance broke I felt terrible and dropped everything to get it fixed, etc.

I charged about 10-15% below market rent and got my pick of tenants because the place was nice and priced so well. Seeing people's credit reports is eye opening. Depending on the area you rent many people who rent do so because they can't afford to buy. In my area, people will pay [FOR EXAMPLE] $1,000 a month to rent a place that they could buy/mortgage for only $750 a month but their credit prevents this. Therefore your main customers are almost automatically a financial risk to you.

Friends made fun of me because I was renting a place for a few hundred less than I could otherwise get. Meanwhile they charged top price for crappier places but constantly had to evict and deal with damage. I am sure I came out better in the end financially but even if I left a bit on the table who cares?

My rental was cash flow positive (had small mortgage which was covered and all other expenses covered with some money in my pocket each month). Regardless the day I sold that place it was like a huge monkey off my back. Some people are cut out to deal with owning real estate and others are not. I had minimal aggravation but still don't want to own property others are living in.

It all depends on where the property is. The area you describe would do well as a short term rental, if you don't mind the extra time spent responding to booking inquiries and communicating with the cleaning agency. Ours does extremely well. We put Amazon Blink cameras on the exterior and digital deadbolt locks so we can easily control when they have access, and know when they check in and out.

We also have many long term rentals (around 100). We have a property manager that does everything for us, for 8% of the rents collected.

They return about 7-8% a year after expenses vs what the market value is now if we sold (and would have to pay uncle sam so would net less). I would much rather invest in rental property than the stock market. I took our 401ks and put them into properties 15 years ago, and it was a good move for us. Plus I can always use one of them to hold more pins, haha.

one important thing to consider is how long you plan to rent it.

Capital gains tax free applies to primary residence that you live in for 24 out of the last 60 months you own it (does not need to be consecutive months).
This can be huge.

You could rent for 3 years and then sell and still get those capital gains tax free.

Biggest thing for me is that I would not want to rent a place so far away. Ease of managing is very important to me personally. Headaches will happen but mitigating them is what I care about.

This question is a pretty simple math problem.
Happy to assist with full details if you want to put out hard numbers.

I personally would take the tax free capital gains and buy multiple rentals if the landlord path is the one you want to jump in on.
Leverage that $$$$ to make more for you.

That is only if the house is vacant. If you find the tenant yourself then you do not have to pay the first month rent.

depends on the area. here in Chattanooga TN none of the 5 companies do that... just charged 6-10% of rents collected~

You never mentioned your moving plans. Are you buying or renting somewhere else?

You absolutely need a management company. There are probably dozens in the area you can choose from. Just like a realtor, do your homework before picking one. If it's furnished, find a corporate housing broker, if they still exist.

You may have some success AirBnB, but there may not be a market in your area if there aren't any comps in your town. A house not on the beach or close to a park isn't going to be a big draw for short term rentals considering how many units there are in the state. Also look at the occupancy of the houses in the next town. If they aren't booked 3 out of 4 weeks, you wont make any money on the rentals. I think AirBnB charges 3%, but you will still need a management company to clean, maintain the house, and take care of emergencies.

We have a vacation home 90 miles away and I would have sold it or taken it off the market if I didn't have a management company to deal with stupid renters. And don't plan on ever wanting your furnishings back after it's rented a while.

Too many questions on the capital gains point to make suggestions - like what's your age, marital status, estimated appreciation, next purchase time frame etc. It's unlikely you have 500K in appreciation, so it may not be a big issue anyway. At least not for 3 years . Do your research somewhere that's not a pinball site.

Listen to this guy. Sell it and take the cash to use for down payment money on a small apartment building or multiple homes. You'll make a lot more in the long run.

I’d advise against this unless you’re doing a 1031 or capital gains will kill you.

Personally, I have no interest in owning a property outright. I own a few multi families in greater Boston and Boston proper. BRRRR method here, averaging an $800k-$1.2m property every two years. Leverage the equity, let renters pay down the mortgage, rinse, repeat, retire early.

If you do indeed plan to keep it and rent it out, research a good management company and pay for the peace of mind.

STRs require A Lot more management than LTRs. You basically become a small hotel operator. Something to consider if you value your time.

This is why property management fees for LTRs are 6%-8% and for STRs 30%.

Keep in mind STRs are also a seasonal thing. You won't get 100% occupancy year-round. You may only get 25%-50%. Then you're worse off vs LTR, not to mention a much bigger chunk going to the property manager.

I'm not against them. It just really depends on the area and the property. Some owners are able to do very well.

Based on your comments, now is the time to sell. Then wait for the correction to buy in.

Like kind exchange is not needed when he is selling a property he has lived in. Cap gains are lifetime tax free (250k individual, 500k married couple).

He can sel his current home and pay zero tax. He can then take that money and do whatever he wishes.

Correct, I hadn’t thought that the property hadn’t appreciated past the $250/$500k threshold since purchase.

And you can always use that money to buy a rental, if renting is what you really want to do.

I here you and raise you some imaginary amount.

Whatever you do, please spend a little time going through this site.

http://www.airbnbhell.com/tag/airbnb-nightmare/