Calling all rental owners - need advice

[australorpchick]

We're in a first time situation, where we now have a rental property and aren't quite sure what to do with it. The home we recently purchased has a 1,130 sq ft, 1bd/1ba (with room for 2nd bedroom if we build an interior wall) guest house. It has it's own address, driveway and electric meter. The cost of the guest house and its taxes are all tied into our mortgage, which we can afford. I've contacted a few property managers and so far, the comps tell us we could possible do a long-term rental in the $800 - $875 range. Our plan is to hopefully net at least $500 and apply it as extra payments to our mortgage principal.

Now our dilemma is whether we should rent this out as a long-term rental or a vacation rental. Our extra (matching) furniture is currently arranged in there and there's not much else we would need to add to make it fully furnished. The area we live in is quite popular for lake enthusiast and while out in the country, we're still centrally located to Austin and San Antonio and all of their touristy stuff. The cause for our dilemma is that we no longer have a guest room in our house for our out of town guests, which we have at least twice a year (most of our family lives in CA).

What are your thoughts, experiences and recommendations?

 

[mom'sfolly]

I'd look at comparable lake homes in the area. I don't know what the long term rental situation is out in Canyon Lake, but my guess is that there aren't that many rental properties.

The advantage of the guest house rental is that you have the potential for making a lot more money, but have to deal with more cleaning and other issues. I also don't know what the insurance implications are. I would think that if you are actually on the lake, you could easily charge the $100-150/night for a vacation rental. You would only need to book one week a month for the extra mortgage money. Other rentals in the area charge that much without lake access. You could easily block out the weeks you have people visiting. Looking online shows some rental cabins in the area and the amenities offered. It might make sense to go look at a few of these places, and maybe ask about the issues the rental companies have. I think it would be very doable.

 

[Talihofarms]

I am not sure about the rental laws in Tex. But what I do for our rental units is, we use a Month to Month lease. This gives us 30 days to inform any tenant of our wishes to not extend their stay.
It is also easier to evict if you must.

We never get "first and last month rent"

It is called "security deposit".

The return amount is contingent on the condition of the unit at the start of the rental date. ( Have a good sighned rental agreement)



I could go on but that is the jist..



Good Luck

 

[calicokat]

Is there a kitchen? If so, pots, pans, silverware, glasses, plates, utensils for cooking, etc. All that would need to be there if folks were going to cook for themselves. I would think vacationers would only be bringing clothes and toiletries?

 

[australorpchick]

Quote:
Yes, it has a nice eat in kitchen. I have an older set of Circulon that's still in very nice condition, that we were going to put in there. We have also have a matching utensil set for at least 8. I would just have to add some plates, cups, pyrex dishes and a few cooking utensils. We have extra sheet sets for that go for that bed and guest towels too. It also has a wash & dryer. We usually rent condos from VRBO for our vacations. I try to base what we like having on our vacations, for what we would need for this place, if we end up going the vacation rental path.

 

[Mrs. Turbo]

We have 2 rental houses and when someone moves out 50% of the time it takes thousands of dollars to repair the walls, carpet....etc and the deposit doesn't even cover half of it. One guy even took the toilet! Taking them to court doesn't work either because they won't garnish the wages in KY and they end up not paying anyway. Everyone doesn't report to the Credit Bureau so you don't have a safety there either. I would look at your state law for rental property and for vacation rentals to help you make a decision. You have to have a strong heart and strong will to rent property.....learned the hard way.
If you are leaving your furniture in there I would do a vacation rental for sure. Not sure how the deposit works on them, but I think some people put a hold on a credit card for the deposit.

 

[Talihofarms]

Mrs. Turbo :

We have 2 rental houses and when someone moves out 50% of the time it takes thousands of dollars to repair the walls, carpet....etc and the deposit doesn't even cover half of it. One guy even took the toilet! Taking them to court doesn't work either because they won't garnish the wages in KY and they end up not paying anyway. Everyone doesn't report to the Credit Bureau so you don't have a safety there either. I would look at your state law for rental property and for vacation rentals to help you make a decision. You have to have a strong heart and strong will to rent property.....learned the hard way.
If you are leaving your furniture in there I would do a vacation rental for sure. Not sure how the deposit works on them, but I think some people put a hold on a credit card for the deposit.

We always do a credit check on our future tenants. $20.00

Bad tenants are just that. They will cost lots of $$$$$$.​

 

[HHandbasket]

Quote:
Rent it to us, long-term. We're on our way. Do you allow chickens?

LOL.

 

[australorpchick]

Quote:
Rent it to us, long-term. We're on our way. Do you allow chickens?

LOL.

That would be sweet. Are you moving here for work? I'll have to ask my chickens if they want to allow chickens.

 

[Baymule]

I rented out my home when I was a single parent and couldn't afford to live in my own home. (I rented a leaky roof dump-cheap) The first renters were straight out of hell, then I learned better. I did a credit check, nonsmokers and no pets. I also asked for references. I got a deposit, signed a lease with ALL the names of who would be living in the house. That way I didn't rent to 2 people who called in their friends and extended family. It helped me keep the house, but I had to be real choosy. I like your idea of weekend rentals better. Then if you decide you don't like it, you are not locked into a year long lease with the tenant from renters hell.