I know I’ve talked about our new house a ton over the last few months, but I don’t think I’ve really gotten into the the fact that we were planning to rent out our old home. We’ve rented out a spare bedroom in our own home on and off for about 5 years, but this will be our first leap into being landlords for a whole house. It’s actually taken longer than I thought it would to get it ready to go, but it is 99.9% done and our new tenant will move in tomorrow!
What We’ve Done
Okay, so here is everything we had to do (and how much it cost) in order for the house to be ready to go:
- Repaint the entire bottom floor since no one except Mr. BFS likes Mint Chocolate Chip Green as the main color - $125 thanks to free labor from Isabelle and Ivy!
- Sand and repaint back door since it was getting rusty – $20
- Touch up paint and nail holes elsewhere – $15
- Replace upstairs guest toilet – $195 ($95 toilet kit and $100 labor – yeah, I just hired help, don’t yell at me)
- Replace downstairs toilet – $165 ($85 toilet kit and $80 labor – yeah, I just hired help again but went to Lowe’s for the toilet instead of Home Depot)
- Hired a professional move out cleaner for the whole house – $180
- Total Cost So Far: $700
And I can do math, so this really would have only cost us $340 if we didn’t outsource, but that would have taken us 3-4 extra days and we were already behind from the move. This allowed us to catch up as quickly as possible. Plus, we are just extremely tired from the last month…I think there is just smart times to outsource…
Despite thinking that everything was ready to go, a few little things came to our attention yesterday that we will be running over to take care of today:
- The upstairs guest toilet is continuously running. It’s only a couple of months old, and already cost us $195, so it better be a very cheap (aka “free) fix or I will be throwing a fit…
- We need to test all of the fire alarms and replace their batteries. One of the alarms in a guest bedroom is beeping all of the time now, so we’re going to start everyone off on the right foot and just replace all of the batteries in one swoop. This will probably cost us about $20 in 9 volt batteries since there are 5-6 fire detectors throughout the house.
The little stuff is just annoying as heck, and I know it gets worse…
Overall, renting out our home was the only, truly logical decision. It could only sell for around $110,000 right now, but it is renting out at $1200 a month. Even with maintenance costs and property taxes, we’ll be making back the sell price every 10 years or less. I know managing a rental is a pain in the butt since I watched my parents do it for more than 15 years, but the financial return in this case is just too hard to pass up.
It’s just cemented further by the fact that our rental house will be completely paid off in 2013, so the monthly rent can go to a maintenance account for the rental house and then the extra cash can be thrown at our mortgage for the new house. So by this time next year, between that rental income and the $600 a month we get from renting out a spare bedroom, we’ll be bringing in $1800 and be paying out $2150 for our remaining mortgage, all property taxes, both home owner’s insurance policies, and the new HOA dues. That would actually be better than I thought a few months ago…
And the long term plan is to pay off the new house by 2022 and stop renting out a spare bedroom too, so uber long term, we’d be bringing in $1200 and paying out about $1200…that’s the plan at least…fingers crossed way in advance.
Have you ever rented out a house? Any suggestions or advice?