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      09-10-2019, 07:27 AM   #14
Run Silent
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Quote:
Originally Posted by DETRoadster View Post
Hear ya loud and clear on the mortgage. We do have a mortgage on the current house but it's peanuts at this point. We can float it indefinitely if needed. The plan was to pay it off in 7 years then rent the place out and move onto a new home with a mother-in-law unit on the property. Mom's health is declining a bit more rapidly than expected and we are prepping to have her move in with us sooner rather than later. Hence the need to move on this before the current place is paid.
What is the remaining balance on the mortgage and what is your expected rental income, net of taxes + R&M?

Quote:
Originally Posted by DETRoadster View Post
You and I run in different circles, MK. You're in the M6 circle with your property management companies and no time for the fiddly details. I'm in the M2 circle and feel compelled to change that water heater myself to save $200.
MK is giving sage advice. If I were renting property in the USA, I would certainly have a property management company handle it all. Trust me, in the long run, it is almost a net zero cost as they really make an impact in keep tenants current, minimizing R&M costs, and more. It's worth looking into.

For my current rentals (these are 3 small, but upscale flats), I personally do the tenant interviews and screening myself via WhatsApp, but I have a property management company that handles everything else. They charge me a base fee during the application process for new tenants, hold any security deposits or pre-paid rent in an escrow account, and then charge me an annual fee of 5% of the gross proceeds. They have contracts with many laborers, so any issues that arise typically cost me much less, so it nearly washes out.

Quote:
Originally Posted by roastbeef View Post
its not going to hurt to consult with a local realtor that has a background in rentals and has rentals themselves. if you're super worried about liability and litigation, get an umbrella policy. $1mm coverage is a cheap couple hundred bucks a year. plus, set up an LLC for the rental.

you can't ask about kids, but you can ask about the number of occupants. some of this might be state specific, so get familiar with local law. also familiarize yourself with laws regarding fair housing and therapy animals (therapy animals are getting more popular).
Roast gives sound advice, with the exception of his comment regarding an umbrella policy. This needs to be absolutely mandatory, not something to do if you are super worried. You would be an absolute fool not to have this.

Speak to an attorney regarding any LLC setup, etc. Sometimes this is advantageous, sometimes not so much. There are other options that have different tax implications, but still provide the veil being offered through the incorporation.
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