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Unread 2018-10-04, 09:37 AM   #2
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Originally Posted by impaul4 View Post
So it's been quite a year, long story short I'm thinking about buying the wife's parents old house in Lenexa near 79th and Quivira. They just did a slight remodel with new floors, bathrooms and paint to make it livable again.

My wife and I have never owned a property before and in my head it doesn't seem too hard to manage but I'm sure I'm missing quite a few components.

My questions are:

1. Is a property management company worth it to deal with the admin of the property?

2. Where and how do you decide on rental contracts and deposits and payments?

3. At what point is it not worth doing it? I estimate after taxes, P&I, to bring about 300-350 home.

4. What can I expect to have to constantly fix, or deal with for tenants? The house is older (built in 70's) but the HVAC, windows and remodels are newer. The only issue is they need a new main sewer line. It has backed up and they get it rooted once a year.

I want to do this as I think it's a great 4 bed house near the elementary schools and would rent to a good family. But I don't want to deal with people from hell.
So I've only ever dealt with owning one rental property and it wasn't a good experience as many know.

Question 1: I think this boils down to convenience. What is your time worth? Are you close to the property where you could get over there at any hour to deal with whatever issues? If you find that dealing with the property in person would be inconvenient, then I would say it's worth it. Since you only have a single property, this might not be the case.

Question 2: Basic rental contracts can be downloaded from the internet. If you want something more specific then it would be wise to consult an attorney that deals in those sort of things. Deposits I would recommend at least 1 months rent as a security deposit. Payments again should be set in the contract. How the payment is to be made, when it is to be made, and what happens if it's late.

Question 3: So you will only be making about $300 extra a month? Seems like that number should be a bit higher with how property values are. Do you have the rent amount set appropriately for the area? Even so an extra $300 a mo isn't bad. Though I would tuck it into a high yield savings so that you have a money bag to dig into when maintenance issues arise. I wouldn't touch it.

Question 4: I would expect the same things to break that would break if you are living there. I typically got calls for the HVAC or basement flooding, both of which I repaired (at a huge cost in the case of the basement). I would demand your renters carry renter's insurance as well.

Make sure you do a background and credit check on any prospective renters. It will be worth it in the long run. This in of itself, will save you a shit ton of potential headache. Good luck!
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