You may think that’s very strange coming from a property management company but we’ve been in the business for a long time.
I have seen a lot of how…I’ve been in real estate for the past 15-16 years and seen a lot of people who’ve rented their house that shouldn’t have rented their house.
Like we’ve had clients that once they came over to us and we were managing their property, they admittedly said, “I should never have rented out my house.”
And so we wan to talk to you, maybe we can help you think about some things to avoid and maybe think about some of these things so that you don’t make the mistake, because once you turn your house into a rental house, that is kind of a long-term commitment, probably at least 12 months if you’re signing a 12-month lease.
I mean, that is a long time to have your house as a rental property.
And so you can search the web and find a ton of reasons why to do it but I wanna talk to you about five reasons you shouldn’t do it.
So I’ve got my list right here. I’m going to read them.
The first thing is that you just really need to think about does the rental return, does that return justify the trouble that it’s going to take to manage that rental property?
If you’re going to do the landlording yourself, you need to really think about is the return going to justify it.
So there are all kinds of things that you need to think about when you think about the return.
You’ve got to think about non-homestead taxes, you got to think about your insurance probably changing, you got to think about maintenance requests from your tenant.
And this is one that I really wanna stop and talk about just a little bit because of the fact that you’ve lived in your house, if you’re living in the house and you don’t really necessarily need things fixed, tenants don’t live like that.
Like if you have a doorknob that has been stuck for a long, long time and you’re just kind of used to it, I know at my house, I’ve lived there a very long time, there are certain things about my house that I don’t really…doesn’t really bother me that they’re not 100%.
Tenants don’t think like that.
So there are going to be issues that you’re going to have to take care of.
So think about all of those types of expenses and then when you finally come to what you believe your return would be based on what you believe you can rent the house for, then you just really need to figure out, hey, is it going to be worth the trouble because you’re gonna deal with a lot of different issues.
I mean, it really is a business once you start renting your house.
Once you have somebody sign a lease, it’s a business.
So that would be reason number one, that the return doesn’t justify the trouble that you’re going to incur from renting your house.
Reason number two is that you have an emotional attachment to your property that you can’t get over.
So if this house is extremely sentimental to you, tenants don’t think it’s sentimental.
It’s not very sentimental to them.
And if you are extremely attached to that and you can’t get over it, then I probably suggest maybe not renting your house.
Like tenants are not necessarily going to think about houses the way…your house the way you think about it.
I can think of a number of reasons why my house would be sentimental. I’ve got two children.
My wife and I have two kids and both of our kids were raised in our house.
There’s a lot of great things that happened in our house, a lot of great family memories and things and if a tenant came in and like changed everything, if I couldn’t handle that, then I don’t need to rent my house.
So that would be point number two.
The third reason you wouldn’t wanna rent your Atlanta house is that you are going to move back into it within 12 months.
It probably is not really worth renting out if you’re going to move back sometime before that 12-month period is up.
It’s going to take some time to rent the house more than likely.
The house has got to be perfect and the pricing has to be right.
So if you’re going to be coming back in 10 months, then it’s probably not worth it to have somebody move in there and then move out during that time.
That’s just based on what it takes to get a house ready, rented, and get a tenant moved in and moved out, just a lot of work that needs to be done.
So if you’re thinking about like just a shorter period of time, it might not be worth it for you.
The Fourth reason you would not want to rent your Atlanta house is that you can’t afford to pay the mortgage if there are repairs that need to be done that are going to exceed the rental amount.
What that means is, and I’ve seen this a lot, is that if you are renting your house for $1500, your mortgage is $1400, you’re clearing $100, and then you have something, a water line breaks or something big happens, a tree falls in the backyard and has to be cut up and removed, and you need to pay for that and you can’t afford that.
So you can’t afford that $500, $600, $700 out of pocket expense, then you probably don’t need to rent your house because unexpected things are going to happen.
And then if you’re gonna keep your house on the rental market for a while, just think if a tenant lives there for 12 to 24 months and they move out, then there’s always going to be work that you’re going to have to do.
You’re going to have to paint some more likely, you’re going to have to clean carpets or replace carpets, you’re going to have to fix stuff and that’s just normal wear and tear.
It’s not related to a tenant doing damage, just normal wear and tear.
So if you’re really tight on margins on your income and don’t have a lot of money to put towards repairs and maintenance, it might not be a good idea for you to rent your Atlanta house.
And then lastly, and this one may seem strange, last reason not to rent your Atlanta house is that you have a relative or friend that wants to move in there.
Now, this may seem very, very strange but once you cross that line and let somebody live in your house and they’re paying you rent, it really becomes more of a business transaction and that relationship changes.
So it’s different when you see them on Thanksgiving and Christmas and other holidays and parties.
I have good friends, like friends that I’ve had for many, many years and we started businesses together.
And I can promise you, that relationship changed.
It doesn’t mean it was bad or it’s bad but it just changes because there’s money involved.
And so I have seen way too many times in this business where a friend or a relative stop paying their friend or relative, the landlord, and it’s just not a really good situation because then you have to be the bad cop and it’s just not a place where most people want to be.
So I would say that’s a reason why you would not want to rent your Atlanta house or home.
I hope those have given you some things to think about.
Doesn’t mean if you hit one out of the five that you should definitely not do it, but just stop and think about it, be honest with yourself and then determine, hey, does this make sense or does it not make sense?
And if you want to talk to us, we’ll be extremely transparent and let you know the pros and the cons, what all of our fees are, if you wanted to use somebody to handle that for you.
If you are going to rent to a family member or a friend, I would recommend using a property manager because they can be the bad cop, you can be the good cop.
But regardless, give us a call. Go to our website, gkhouses.com. We’d love to hear from you.
You can email us at [email protected]
Somebody will be right back in touch with you. And you can even get a free rental report.
We’ll shoot you over what your house should rent for in a really nice, slick report complete with comps.
Anyway, have a great day.
I hope to hear from you soon.
Spencer is the VP of Marketing at Evernest. He wakes up with Google and Facebook on his mind. Having bought and sold over 150 homes in Birmingham, Spencer gets a kick out of helping new and seasoned investors navigate the mistakes he made as an investor. Spencer is also passionate about his love for Michael Jordan and does his best to explain to the Millennials (who never saw him play live) how much better he was than LeBron. He loves to hang out with his wife, kids, and the world’s best black lab, Jett.