Rental - Posted by Adam-MI

Posted by David Krulac on March 18, 2006 at 05:41:22:

many insurance companies charge MORE for landlord insurance than homeowners on the theory that the homeowner will take better care, have less defferred maintenance and take more pride in preventing small problems from getting to be big problems. The insurance companies feel that tennats are more of a risk than owner occupants and therefore more risk = more premiums.

Rental - Posted by Adam-MI

Posted by Adam-MI on March 17, 2006 at 11:02:39:

I am about to buy my first rental house, and I’m not sure what to factor in for insurance and taxes. I’ve been told that they are somewhat higher than for a personal residence – how much higher should I expect?
Also, this will be structured a bit like a commercial NNN lease – have any of you done this with a SFR? I’m planning to charge the renters (my parents, actually) exactly what I pay (PITI), and have them be responsible for all repairs, updates, etc. Being my parents, I know they will not screw me, so I am less worried about the break-even cash flow at this point. Anything to be careful of, that I may not be thinking of??

Re: Rental - Posted by speednxs

Posted by speednxs on March 18, 2006 at 07:55:34:

I would have your parents sign a lease/rental agreement. You can pick one up at a stationary or office supply store. Have you thought about the term? Month-to-Month? 1 Year Lease? Lifetime? Sadly, you may have to evict your parents some day if you get into an disagreement with them and they come up with the clever strategy of not paying rent anymore.
Having them responsible for “all repairs” is a little unrealistic. Are they really going to replace a $5000 roof? Termite Tent? New Furnace? They might think fixing leaks can wait for a few months because their expenses are a bit high right now. They just bought that big graduation present for little Bobby. In an eviction you do not want your tenants to have an equity interest in the property. Big repairs could be considered an equity interest. Maybe you pay for all repairs over $500 (whatever).

You are doing a good deed, but at some point you are going to have to decide if you are a child or a landlord.

Re: Rental - Posted by John

Posted by John on March 17, 2006 at 19:59:51:

Taxes are the same for owner occs or rentals. The landlord insurance will be cheaper than homeowners because it does not cover personal property.