Anybody own rental houses? Needing advice

[mikey176293]

I'm looking to get into buying houses to rent here in the Tulsa area and was wondering who had experience in this. I have a few questions. If you do answer, I'd appreciate if you would put what experience you have had, ie. You own 1? 2? or have you just read a book on it, ect. and also how would you rate your success in being a landlord. You are welcome to answer all or any of the following Thanks!

1) Where and how did you come up with a lease agreement? Online? Yourself? Lawyer?

2) What criteria does your tenant have to meet before they cant rent?

3) Do you charge a application fee? If so, do you refund it if they do not pass?

4) Do you have suggestions on a good handy man? cpa? landlord attorney?

 

[TonyRumore]

Keep in mind, kids will tear the house up 10 times worse than pets. It won't take you long to figure that out....trust me.

Tony

 

[flatwins]

I had one rental property but sold it. Being a landlord is for some people but I wasn't one of 'em.

 

[weav199]

My wife and I have 8 rentals. They are our primary income.
1- found a general lease online and modified it to suit us.
2- min 2 yrs employment history, past landlord and personal references.
3- no app fee. App also found online.
4-I'm the handyman, wife is the bookkeeper, CPA wants $500 yr to handle LLC paperwork. Renter/landlord laws are pretty plain and easily understood. Haven't had the need for an attorney. If you have to legally evict someone, it's just over $100 to file a case in court and about $50 for Sherriff to serve papers. If your diligent in keeping receipts, you should be able to handle it yourself and save money.

 

[tyromeo55]

My only advice. Get a copy of the landlord tenant act ( TCSO should have them) and read it

 

[Chavezz]

I dont own any yet but I hope to soon. I plan on finding a few lease agreements online then creating my own.

 

[swampratt]

I am with weav199
I do my own repairs..but i hardly need to repair them..I install all new water faucets and 1/4 turn shutoff valves on everything.
new toilets in all..tile in entry way and kitchens and bathrooms.
$ 300 non refundable pet deposit..be surprised how many people get rid of the pet...Clauses in the rental agreement.
You break something or your family does.. you will pay for the item and my labor.

Deposit is same as rent amount..
I talk to the people and call their employment places..do some online checking...
So far i have been lucky..all my renters are great...

I am redneck..I hold back no BS I tell them if you are late 5 days on rent you will get an eviction notice..
You dont pay i will camp out on top of your TV set and i get pretty smelly after a couple days...I tell all of them that..
First renter i had thought i was nuts...his wife told him to come to my house and tell me he was going to be late on the rent.
HE told her Bull crap !! I ain't starting that with him...

I helped them to purchase a nice house of their own after they saved up some money for a couple years.

If you get a cheap house in a bad area.. like low rent area ..Think about an owner rent to own deal...

I got one for 20K sold it for 42K at 10% interest 6500 down 500 a month...Win win on that deal...
I carry the insurance on the houses...
I know a lady that sold the same house 3 times in 1 year 6500 down each time.. non refundable....
She gave me that pointer..
Have fun with it....
Do not rig stuff in them to make them work...fix things right and you will NOT need to fix very often.

 

[Belthos]

I own a number of rental properties, these days it's what I do for a living.

Make certain you get the lead based paint disclosure pamphlets, give them one when they sign the lease.
There is a disclosure form that shows they got the pamphlet make certain they sign it.

If you think this is a hands off way to make money, look elsewhere.
That said if you can handle the showing, cleaning, repairing, and debt collection yourself you can make money.

In Oklahoma county it's closer to $230 to get someone evicted by the sheriff once you include all the court costs.
I don't do it often enough to remember off hand and I'm too lazy to check my records right now

You will need to pay special attention to how much the property taxes are, some of mine run over $1200 a year some are less than half that.
You need to remember that they have nothing to do with real market values, so whether or not your property goes up or down in value your taxes will continue to move upward every year.
If I recall correctly we paid over $11,000 in property taxes last year.

You do get to deduct your property taxes from your state and federal taxes but depending on your tax bracket you should expect property taxes to cost you more than the income taxes on the properties.

If there is a maintenance problem fix it right, fix it now. If you are really capable of doing a repair yourself you can save a lot of money.
If you do not know what you are doing you can run up your costs by trying to rig it yourself then pay a professional to fix the problem and the additional damage you did.

Electrical and plumbing can be very expensive, hire a professional it's cheaper than doing it yourself in the long run.

Charge the rent and deposit up front in cash is best, just always give them a receipt. If they do not have the ability to pay one months rent + a reasonable deposit, I usually charge 500-550 for deposit, do not expect them to catch up later.

You must put the deposit money into a separate trust account in a bank, never co-mingle your money and the tenants money. Remember the deposit is not your money unless they violate the lease and you can use it against unpaid rent, legal fees, cleaning etc.
Do not expect to make anything off their deposit, you will be lucky if it covers most of the costs if an event comes up.

Keep every receipt for each property in a separate file for tax purposes.

Seriously consider hiring a tax professional to do your taxes, it's not required but it's good peace of mind, you do not want to get audited and if you are audited you want to be sure you have your i's dotted and your t's crossed.

Dogs and other pets, I love my dog by the way, can cause phenomenal damage to a house, I've seen things you would not believe and would never want to have to clean up.
Expect to have to rip up carpet and pad when people allow animals to urinate freely inside the house, factor the costs of new carpet and installation, a small house will run you $1200-$1400 in carpet installed for decent rental carpet.
Choose mottled colors in earth tones, never put in solid color carpet. I bought a carpet steam cleaner years ago and it just keeps paying for itself.

If you want to make money renting homes you really can make a living at it.
If you are not prepared to be hands on especially for cleaning, basic maintenance, doing your own collections and evictions, you will be eaten alive in expenses.
Bear in mind you will have to lose a day of work if you need to evict someone, it is simple to do and you do not need an attorney.

You will make much less per house than you expect after expenses, vacancies, taxes.

I paid cash for mine and I strongly advise caution if you are trying to buy rental properties by financing them and trying to use them as a stream of cash flow venture.

 

[FullAuto]

1) Where and how did you come up with a lease agreement? Online? Yourself? Lawyer?

2) What criteria does your tenant have to meet before they cant rent?

3) Do you charge a application fee? If so, do you refund it if they do not pass?

4) Do you have suggestions on a good handy man? cpa? landlord attorney?

1. My father, also a landlord, has a coworker who is also a landlord. That guy has a wife that is an attorney. I used his and modified it very little. It's only about 2 pages and I think I changed maybe 2 sentences. My father's contract, IMO, is crap.

2. I only own 3 rentals and I personally have known everyone that has lived in them. One was a coworker and all the rest have been friends.

3. No, because I've never had an application.

4. My handymen were the brother of a friend of mine and a guy I go to church with.

The people are important, but finding the right property is MUCH more important IMO. A person can tear up a nice or poor property. That variable is difficult for you to know up front. But if you get a decent person in it, you don't want to house bleeding you to death from breaking down.

 

[mr ed]

if you can't do the repairs yourself, don't get in the business. period!

Tulsa county costs $153 for an eviction in 2012. first one I've had to do in many years.

stay away from section 8 it no longer pays good and is getting worse in terms of policies and rules.

you need to know the landlord tenant act. there are things you can and can't put in the lease.

most people that charge an application fee are in the application fee business. in otherwords they never rent the houses because no one meets their qualifications. they just advertise and collect the fees. I've seen the same houses set vacant for years with for rent signs out front and being shown regularly. what a scam.