I'm interested in some feedback regarding a situation we're facing regarding our rental property. It is our original starter home purchased in 1992 for $130K. In January of this year it was valued at $330K. We own it outright and have a mortgage now on our primary residence.
Ok, the situation now: our last tenant moved out in Dec 06 and was paying $1,350. A family member lived there from Jan to June paying our cost ($300/month for taxes and $44 for insurance). Here rental properties are sitting and not moving at all. We had a prospective tenant drop into our laps -
this is a couple returning from South America missions - husband has a 3-year contract teaching in a private school making $45000. The most they can afford to pay is $1,000 plus utilities (which will be in their names). They will sign a one year lease and pay six months cash rent up front. They will have to buy a mower and do lawn maintenance on their own (we take care of exterior maintenance). We had decided we'd probably have to drop the rent because of how many things are on the market.
Do we take these tenants (no credit history as they've been out of country 20 years) but have strong local ties and come recommended from a friend of the guy across the street at $1,000 (probably $150 per month less than we might get)? (Of which I can put $6,000 in the bank and make 5%-ish.) We are spared advertising cost and the month(s) it might take to rent. Or do we place the ad in the paper and hope to make $1,350?
Just wondering what your thoughts are on this. Thanks in advance for advice.
Advice Needed on Rental Property Situation
July 29th, 2007 at 01:47 am
July 29th, 2007 at 01:51 am 1185673871
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July 29th, 2007 at 04:52 am 1185684741
July 29th, 2007 at 02:02 pm 1185717733
July 29th, 2007 at 02:25 pm 1185719119
Thanks all for the feedback - I am inclined to agree with all of you but needed some unbiased feedback. We have relatives (not quite like-minded) who thought it might not be prudent. I have only spoken to the man on the phone, my husband met him in person when he came to look at the property. My only hesitation came from the fact that he said the most he could afford was $1,200 and then after looking at it was the most he could afford was $1,000. Etc., etc. I'd have been far more likely to be less hesitant if he'd been more upfront. I get the feeling that he might be trying to low-ball because he used the "I am a missionary" statement far too much. And I want to help the missionary as much as the next guy ... and I do want good tenants, of course. I will let you know how it ends up, he is calling us this afternoon (there was a possibly offer to live for free with other relatives and that was going to be finalized this AM) so we are really the 2nd choice for the couple.
July 29th, 2007 at 04:58 pm 1185728300
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