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Realtor Questions

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  1. DoubleUp28 DoubleUp28 is offline

    Chicago, IL
    United States

    Posts: 1,046
    Joined: Feb 07

    Jul 8th, 2011 (7/8/2011 7:38pm)

    I own a townhouse and just accepted a job offer which is a little over an hour away from my house. I live in the SW suburbs of Chicago and want to move to the city which would cut my commute in half. Ideally I'd like to rent out my townhouse and find a place in the city to rent for a few years. Anyways, I have a few questions:

    1.) I've read up on this and I'm almost positive the answers yes but...I have an FHA Loan, can I rent out my townhouse?

    2.) Before I start calling around, assuming the monthly nut on my place is 2k what cut or how much does it cost to pay a rental agent or agency to rent out my place, collect payment, etc.? I've heard btw 7-12%/mo. but I dunno...

    3.) How difficult is it to rent out your dwelling during this economy when nothings selling? I know it differs but I live in a very nice neighborhood with families, retirees. weeks? months? is it the same as trying to sell your house?

    Any advice/previous renting horror stories would be appreciated. Thanks.
  2. XquiziVex XquiziVex is offline

    French Polynesia

    Posts: 5,748
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    Jul 8th, 2011 (7/8/2011 7:45pm) in reply to DoubleUp28

    1) Yes. Even though you have a mortgage, you own the home and can rent it out if you damn well please.

    2) Your percentages are about right....generally 10% is the norm, but worth every penny. They deal with all the headaches and send you a check every month.

    3) The economy is actually helping the rental market. It boils down to 3 things: Location, Location, Location. If your place is in a good area, ie close to shopping, good schools, convenient roads, etc. you should have no trouble finding tenants.
  3. norcaljeff norcaljeff is offline 2010 OT Thread Kill Leader

    San Francisco, CA
    United States

    Posts: 36,709
    Joined: Sep 07

    Jul 8th, 2011 (7/8/2011 7:46pm) in reply to DoubleUp28

    1. idk

    2. I pay 10%, pretty standard I think, but it saves you all the hassle. On the other hand you are fairly close so you may want to do it yourself. but if someone calls with a stopped toilet in the middle of the night you won't be happy lol. the prop management fees are also deductible (I think, not positiveon that one. see below re tax guy))

    3. usually it's easier i think. if people can't afford to buy they rent. check rent prices in your area and where you want to live. also, if you have a townhouse (with like a home owners assoc.) there might be rules re renting

    be very aware that your house can go unrented for a long time, or you can lose a tenant halfway thru a lease. you can't just count on the rent you get paying for your new rent. also, be sure to consult a tax guy. renting out is a whole new ballgame re taxes. you can depreciate and deduct many things against the rent, but also be aware that if you aren't living in the house for a year or two you won't get the same breaks if you sell it (rental prop v. primary residence). glglgl
  4. Blake801 Blake801 is offline

    United States

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    Jul 8th, 2011 (7/8/2011 7:46pm) in reply to DoubleUp28

    Yes, you can rent out your home. Don't know how much rental companies charge. Its easier to rent your home out right now than it is to sell it as a lot of people don't qualify for mortgages and are forced to rent. But the big problem with renting out your home is finding good tenants that pay their rent on time and won't destroy your home. Good luck.
  5. coolhandkev coolhandkev is offline

    IL
    United States

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    Jul 8th, 2011 (7/8/2011 7:49pm) in reply to Blake801

    To add, be careful you can NOT rent your home out if you received a federal first time home owners tax credit within the last 3 years. You have to live in the house for 3 years from the date of closing prior to renting it out or you have to pay back your tax credit.
    Edited By: coolhandkev Jul 8th, 2011 at 07:50 PM
  6. DoubleUp28 DoubleUp28 is offline

    Chicago, IL
    United States

    Posts: 1,046
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    Jul 8th, 2011 (7/8/2011 7:57pm) in reply to coolhandkev

     
    Originally Posted by coolhandkev View Post

    To add, be careful you can NOT rent your home out if you received a federal first time home owners tax credit within the last 3 years. You have to live in the house for 3 years from the date of closing prior to renting it out or you have to pay back your tax credit.

    Damn, I received the 8k tax credit. I closed on my house in Feb. of 09' so your saying that I cannot rent it out for another 8 months or I have to payback the 8k?
    Thread Starter
  7. XquiziVex XquiziVex is offline

    French Polynesia

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    Jul 8th, 2011 (7/8/2011 7:58pm) in reply to DoubleUp28

    Ouch, good add coolhandkev.
  8. coolhandkev coolhandkev is offline

    IL
    United States

    Posts: 5,973
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    Jul 8th, 2011 (7/8/2011 8:00pm) in reply to DoubleUp28

     
    Originally Posted by DoubleUp28 View Post

    Damn, I received the 8k tax credit. I closed on my house in Feb. of 09' so your saying that I cannot rent it out for another 8 months or I have to payback the 8k?

    Yeah, unless you rented it to a friend or family member under the table or something.
  9. ripomatic ripomatic is offline

    Posts: 3,228
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    Jul 8th, 2011 (7/8/2011 8:02pm) in reply to coolhandkev

    Yes you can rent once your two years out....its illegal in the first two years of your mortgage.... once you have rental contract you can use/ count 80% of that income towards you gross income to purchase another....housing is cheap buy buy buy......
  10. DoubleUp28 DoubleUp28 is offline

    Chicago, IL
    United States

    Posts: 1,046
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    Jul 8th, 2011 (7/8/2011 8:03pm) in reply to ripomatic

    I guess 8 more months isn't that bad I was worried I couldn't at all b/c of the FHA loan.

    Great info and advice guys, greatly appreciated it!
    Thread Starter
  11. kiro15 kiro15 is offline

    ME
    United States

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    Jul 8th, 2011 (7/8/2011 8:05pm) in reply to XquiziVex

    might want to double check all your FHA paperwork, there might be a stiplulation in there. Using FHA rates to buy rental properties is a relatively common mortgage fraud. You obivously are not doing this but it's never as easy as, "it's yours, do what you want."

    And as far as I know there really isn't anyway around the tax credit time limit.
  12. norcaljeff norcaljeff is offline 2010 OT Thread Kill Leader

    San Francisco, CA
    United States

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    Jul 8th, 2011 (7/8/2011 8:25pm) in reply to kiro15

    yeah, ot owns, but consult a professional...then double-check with ot obv lol
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