How Are You Renting Your House While Cruising ?

[keepondancin]

Reread my post, and need to correct the fee my realtor charged to find a tenant. Her fee was one month rent, and it is usually paid by the tenant. As for the tax issues, I believe that just declaring the income as unearned income keeps the tax guy away, and the insurance companies need to be notified. You can get coverage, but the premiums are higher for a rental. We are going to rent our house this year, and neither the accountant, nor theinsurance agent is saying anything that is raising flags.

[Paul L]

Originally Posted by SV Demeter

Can you give me some examples of why its worth it? Our house will likely rent for $2,500 per month. That sort of rent in an of itself should provide somewhat of a deterrent to problem renters. At 10% thats $250 per month or $3,000 for the year. For the $3k they find me a tennant and call someone to fix stuff that breaks, sending me those bills too. $3k buys a few plane tickets back from the Caribbean to deal with problems in person too.

Not sure how long you plan to be out, but even one month a year without a tenant is $2,500 to you. Not sure how far away you plan to travel, but having to head home to deal with a tenant, like a friend of ours just had to from southern Mexico, might cost you a few grand in airfares and rental cars....

[Cheechako]

Get the right company or person. Some people are real good at renting and picking tenants... others just... well.... have excuses....
Ask to deal with a specific person not a company, and interview that person. Ask tehm things like "how do you select a tenant?" etc....

[dennisjay]

Lot of horror stories here. My experiences have been quite positive, though I only have one home to rent out. Tenants have been great. Take care of the place. I communicate by e-mail. Last week they called, said there were some rotted boards on the garage. Sent me photos from his iPhone to mine. I e-mailed my handyman and it will be fixed the next three days. And then I will pay his bill online. Much easier to cruise with good wi-fi throughout the Bahamas.

[hogesinwa]

We rented ourselves to family friends many years ago. No horror stories but certainly made for some tense exchanges that I would have preferred to avoid.

Now we're using an agency. Rate is something like 8%, with an additional fee if there's a changeover and re-leasing. Cost/s is/are tax-deductible in Oz. Inspections are regular and up-to-the-mark as to standards. All statements come via email. Handyman/gardener is retained to make sure reticulation runs and doesn't block up or go off because of power blackouts.

Not actually keen on paying the money but I'd rather pay that money than have to do it myself. Besides, the house is in the south west of Western Australia and I am sitting on the New River in Fort Lauderdale. Negotiate a lower fee then relax while someone else does the work.

[SV Demeter]

Originally Posted by dennisjay

Lot of horror stories here. My experiences have been quite positive, though I only have one home to rent out. Tenants have been great. Take care of the place. I communicate by e-mail. Last week they called, said there were some rotted boards on the garage. Sent me photos from his iPhone to mine. I e-mailed my handyman and it will be fixed the next three days. And then I will pay his bill online. Much easier to cruise with good wi-fi throughout the Bahamas.

Thanks Dennis. I see you are from Annapolis as well. Did you find your tenant yourself or are you using an agency? We are looking at Innovative Property in Eastport and Annapolis Property Services. Both seem well reviewed. One has a simple 10% fee structure the other is more complicated with a 9% fee plus a tenant placement fee of 84% of first months rent.

Thanks to all the others who have responded this is very helpful.

[cat man do]

Wow, finally one thing I get cheaper in Australia Vs the US.

We pay a flat 5% including postage for our property manager .
For that they handle:

* Rent collection and distribution.
* Maintenance, providing quotes and photo's if required via email and then I give her the nod or offer alternatives.
* Provide 3 monthly inspection reports with photo's on general condition and details of maintenance issues.
* Eviction and court appearance if required.
* Advertise and source new tenants for a charge of one weeks rent.

I have been using them for 10 years with no problems worth mentioning.

[donradcliffe]

We have rented our house out for 18 years and the income was a major part of our cruising budget. We started out with a property manager, but the worst tenants we had were picked by the manager, and we have gone without one for 14 years. You learn to trust your instincts when you pick tenants, and we offer below market rents and usually have 5 or more qualified tenants to pick from. We start out with a 1 year lease and then convert to month-to month.

We have a handyman who is a sailing friend that we can trust but is nice to get a tenant who likes to DIY. We also have the tenants deposit their rent into our checking account, and with online banking we can see within hours whether they have paid the rent or not.

Your insurance company will usually want to convert your homeowner's policy to a landlord's policy--less coverage and higher prices-- if you rent for more than 6 months.

[Celestialsailor]

I have rented places out over the years myself. Usually miles away from where I am. When I was in Ca., I rented my Hi. place for 2 years. Then when I was in Hi., I rented the Ca. place out. It's a mixed bag. Right now I'm in Ca. and the duplex across the street is managed by a company at 10%. Their choice of tenants are a nightmare. I doubt they dig very deep into the back grounds of the trash they rent to. Luckily the police hauled most of them off and the parents left on their own. My neighbor/friend is going to collect my rent for me and do the landscape for a fee. It will be around 10% but that includes the landscaping too. I feel I'm better off screening myself, since I've had lots of practice. The first thing I do is make them supply their own credit report. That weeds out 90% of the flakes.
Please note...property managment companies are responsible for didily!

[cat man do]

Originally Posted by Celestialsailor

The first thing I do is make them supply their own credit report. That weeds out 90% of the flakes.

Bugger that
I wonder how many have altered a shitty CR to make it look good for you?
Easy to do with these new fangled contraptions called computers and printers.

[Celestialsailor]

Originally Posted by cat man do

Bugger that
I wonder how many have altered a shitty CR to make it look good for you?
Easy to do with these new fangled contraptions called computers and printers.

I've never had the problem...have you?

[Randal Johnson]

I pay a business manager to handle my affairs back home including four of the five residences. One is handled by a professional management realtor and that property gives me less problems. I tried to get the realtor to take the other four but he declined. I'd say pay someone the ten percent and enjoy yourself.

[cat man do]

Originally Posted by Celestialsailor

I've never had the problem

How would you know unless you check the document is correct through a reputable agency yourself?

...have you?

No, but my PM actually does checks through reputable agencies.
That's what I pay them the big money for. (5%)

She doesn't rely on a tenant turning up with a piece of paper telling her how good they are.

[Celestialsailor]

What I mean about not having a problem is there are 3 major credit agency's here. The print outs are on their stationery and dated. I've never had a problem with tenants that provided a credit report. Like I said...90% of them just move on when I ask for one. Credit reports are not the only thing I go on. I call prior Land-lords (usually 3 back) to verify if they were decent.
You're making points on pure speculation. PM's here are 10%. They take no responsibility for the tenants they get. On this side of the pond, it takes the home owner 90+ days to get bad tenants out. Not only do you loose 3 months rent but they usually trash the place knowing they will never get their damage deposit back. I've probably had 10 different tenants over the years and had 2 not so great experiences. One cost me $3500. Both experiences were in Hawaii.
I'm glad your PM works for you. To each their own.

[foggysail]

Depreciation was mentioned a couple of times in this thread. If you declare your income..........AND WE KNOW THAT IS TAXABLE, you are responsible to depreciate!!!

I did my best to avoid depreciation because I did not need it and further, I did not want to pay it back when the properties were sold. But the IRS has a gotcha!!! The law...and you can read it yourselves in most tax filing books states something like "when you sell, you are required to repay the depreciation that you took OR SHOULD HAVE TAKEN at 25% of the amount depreciated."

Avoid it at your peril.

Foggy