Friday, October 3, 2008

Landlording Question-How Involved Should I Get?

My renters decided to pay me today. That's a relief. They've been struggling quite a bit with money issues since their friends moved out and the construction jobs dried up. He said he got another job today and his wife got one too. Now they have 3 jobs. I allowed them an extra day to pay the rent and they were very happy that they were able to come up with the whole amount. Unfortunately, I brought up the fact that they will most likely have to move out in January. I could see his face fall. Moving will put them in to another financial crisis since they will have to come up with first and last months rent somewhere else, move their children to a different school and change the utilities over again.

I would like to help them out but I can't think of how to help them exactly. I don't have another place for them to live. They agreed to this arrangement when they moved in. He tried to point out how beneficial it would be for me in the long run to keep them as renters. If he stayed I wouldn't have to find new tenants after my short-term tenants leave in February. But then I wouldn't get $4,000 from my short-term renters. I pointed out how nice it would be for me to move back in to my house after my short-term renters leave. I probably wouldn't move back in for long, just until I found another renter. It would be like a little vacation to move back in and have trash and water again.

I have considered having my old un-safe mobile home towed away and buying a used, nicer model. They could rent it from me for a month. But the cost of that would be at least $20,000. After they left I could rent it to someone else I guess. That would mean I would be a landlord for 2 places and my RV would be VERY close (like 10ft away) to the mobile home. So much for privacy.

So the question is:

#1 Should I stick with plan A which is kick out current renter so that the short-term renters can come in January and I get $4,000. Then find new renter when they leave in February.

#2 Or tell short-term renter that the house is no longer available and refund their $100 deposit. I'll lose $4,000 in rent but gain $1,000 of regular rent and guarantee consistent payments by keeping the current tenants.

#3 Or tell current tenants they can stay and try to rent one of the vacant houses on the street for the month of January for my short-term tenants. This is risky because it can only be arranged at the last minute. No one is going to keep their house vacant just so I can rent it for one month. this would also mean that I would have to start all of the utilities for only one month, pay rent, and furnish the place (could be done with craigslist). There are too many unknown factors in this plan.

#4 Or buy a newer used mobile for my property and see if current renters want to stay there for a month. They don't want to move at all but I wouldn't make them pay first and last months rent to stay there and then they could move back to the house. It's not like they have to move a bunch of furniture. Most of the stuff in the house is mine anyway because they rented it furnished. They could drive the kids in to town to their same schools and it would only be for 5 weeks.



Anonymous said...

Hi, I have been reading your blog for awhile now:) love it by the way. I had to put my two cents worth in and I think you are very smart to put all of this on your blog as sometimes decisions are so hard to make if you are personally attached to them. I think no.4 option sounded like the best one to me, as if I was in your situation I would go for that option. Let us know what you decide and good luck with the process, my thoughts are with you:) Courtney.

Anonymous said...

I'm another of your "quiet" readers. If your current renters are people that you like, number four is a good answer. The downside is that you seem to be someone who really likes her privacy and quiet time. Children are seldom quiet. I tend to be cautious and long term in my thinking, so I would keep them as renters in your house. The old bird in the hand scenario. I don't know what the rental market is like in Tucson, but here in Phoenix it can be difficult to find people to rent to that are trustworthy and reliable. Just my two cents. Best wishes and good luck in whatever you choose to do.

Lizzie @ her homeworld said...

Hi Daizy
How about re-homing your renters in your mobile home for a month (at a discount) and you either stay with a friend, take a holiday or buy a tent? That way you don't lose them or your regular monthly payment but they aren't right in your pocket with you? How far is your house from your land?

Daizy said...

Interesting comments Courtney and patty, I didn't expect any one to pick option #4. Financially it is a risk for me. If it works out right I could make more money but if it doesn't work it could add a year or 2 on to my mortgage repayment plan. Like any investment it has some unknown factors so I will do some research.
Thanks for your comments!

Daizy said...

Hi lizzie, do you mean put my renters in my RV? I have thought about that but they have 2 children and he just mentioned his pregnant older daughter would be joining them in a few months so I don't think they would fit.

My original idea was to renovate my mobile home but I decided I would have to put too much money in to it. My new idea would be to get rid of the old mobile and put in a new one in the same space which is only 10 feet from my RV. We would be cozy neighbors.