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Renting out the right way (and the wrong way)

March 16th, 2006 at 03:06 am

I was reading various blogs, and a few discussed the stress of getting a renter for their (house, apartment, basement, ...). As I have a renter in my home now, I thought I should put my two cents in on the subject.

Since I have moved back to the US from living overseas (13 years ago) I have had renters in my house for 3 of those years, plus I have had renters living next to me often.

I have not had problems with renters in my home yet. One of the things I do is consider do I want to restrict the number of people renting from me (that is, charge a high amount) and take a chance, or charge less and and be picky on who I rent out to. So far I have gone the conservative route (charge less) and it has worked for me.

When I lived in my old townhome the neighboring home was rented out by this immigrant car salesman. When I saw him, which was seldom, he would always be friendly, and talk like he knew what he was doing. Well he would charge a high rent, and could only get people in that place that couldn't rent elsewhere (ie. had issues). They would cause a ruckus all the time, get visits from the police, and finally trash the house after living there for a year and move out. Mr. Brilliance would come in, fix up the house, and look at me like "Why are you upset with me?", and do the same thing over again. He wouldn't make any money because all his profits went into fixing the place after each set of renters left. I tried to explain it to the wife, but she thought her husband knew best.

About a year after I moved out I heard that the guy finally sold the place after losing so much money on it. I know people here wouldn't be as stupid as that, but it is painful when you have to live next to that nonsense.

As for my current renter, I advertised for less up front, and picked who I wanted, not who I could get. He likes the lower rent and decent location, and make a point to pay on time and even helps on any projects around the house (which has been rare).

I guess my point is, like investing, going the slow and steady way is the way to earn the most in renting out your real estate.

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