Letting a renter make changes to a rental

[CONeal]

Since there are a few landlords on here thought some could chime in on what I'm missing bc I am baffled.

 

So I have someone interested in renting out the farm house but it has me baffled.  Does anyone know what the catch is or have they experienced this before.

 

Condition of the house:  it's seen it's better days the walls could use a fresh coat of paint and the carpet really needs to be replaced.  There are hardwood floors underneath.  We are not wanting to put very much money in the house bc we will start the process of selling the place in about two months.  The value is not in the house (most likely would be tore down whoever buys it) the money is in the 40 acres.

 

A perspective tenet wants to rent the place out fully knowing everything above.  However, they want to be able to redo the inside so that is more livable to them.  They would paint and make the inside of the house look nice again.  They are really attracted to the location bc it's in the middle of both their grandkids. They would make these updates on their own dime with the full understanding that all we have to do is give them 30 days notice once the place sales.  They have said repeatedly that they want to do it so it feels more like a home.  We would not need to reduce rent or repay them for the supplies that are used.

 

Since this is a little to good to be true.  Where's the catch 22.  What the he'll am I missing?

[CONeal]

My estimate is around $1500 for what they want to do.

[fareastwarriors]

Hmm They know you are selling the place in a few months but still want to rent and make upgrades...

that does sound good...maybe too good..

 

 

Since you say it will be a tear down anyways, sounds like there is not much to lose as long as the below is considered.  But with that said, I would still do the standard application/credit check/rental agreement/etc.

 

Also what is rent going to be?

 

 

Few things I would consider:

Is your state friendly to landlords? is there rent control in city/county? How is the eviction process (if necessary)?

 

 

Good luck.

[CONeal]

Rent is 550/mo.  They would need to go through the property manager so the credit and all that is taken care of.  Eviction normally takes around 60 days. No rent control.

 

If we were planning on keeping the place I would understand what they are doing.  We've allowed stuff like that in the past (once it was ran by us).  With the possible turnaround of it being sold so quickly I'm at a loss of understanding what they are trying to do. 

 

Your right it does sound to good to be true. 

 

 

[fareastwarriors]

For that little a month, personally I wouldn't bother renting it out and save my energy to work towards getting it sold instead...

[CONeal]

It may take 6 months to sell the place.  So mine as well have money coming in while waiting.  Isn't really much extra effort once someone is in it.  Better then being milked with expenses during that time.  Also having someone out there makes it less likely to have the place vandalized.

[Scorps]

Are you able to ask for the first and last month rent upfront before they move in? This can be another screening test.

[fareastwarriors]

If you were less experienced or some newbie/first time landlord, then I wouldn't think it would be a good idea.  But it seems like you're an experienced landlord with property management and you understand the process and have a system in place. Given all that, I would say go for it.

 

 

Thanks for pointing out that the sale might take a lot longer than expected. It would be nice to get some cash flow while you wait for the sale.  I don't know where your property is but I'm in the SF Bay Area and I'm so used to seeing any decently priced property going pending with a few days (or a week at most)...

 

My family and I brought 2 triplexes last year but this year we couldn't buy any property. The prices in the area went up like crazy and every decent priced property had multiple offers and was way over asking. I'll keep looking and waiting...

 

[Grenville]

Could the renters make it harder to sell the property?

 

The renters may not be interested in having you sell the place once they move in and do the upgrades. Could they run interference when you're trying to show the property? Seems like their interest and yours aren't aligned.

 

Can you get something in writing saying that they fully understand that you could potentially move them out in two months? Something that explains the verbal understanding you have versus the legalese in the renter's agreement.

 

Just some thoughts, no experience in this arena.

[CONeal]

If we do go with this guy it would state in the rental agreement that they are under the full understanding that the place is for sale and we will give them 45 days notice upon the sale of the property unless arrangement are made with the new owner.  Any changes or upgrades to the house is at the renters risk and will not be reimbursed for any upgrades made to the house.

 

If they are in the house I'm going to pitch it that they already have a renter in place if they want to wait a little bit before whatever they plan to do with the property.  I'm thinking it will either be sold to someone for a subdivision or a hobby farm property.

 

Anyone could create a headache when showing the property.  Most of the property can be seen without having to mess with the house. 

 

We are at odds, that why I don't understand why they are so hard pressed to make the changes. 

 

The only thing I can think of is they think it will take awhile to sell.  Starting to lean toward renting it to a lessor desired renter.

 

  Something doesn't feel right about this and I can't put my finger on it.  Hopefully when he fills out an application something explains it better.

 

Back of my mind has me wondering if it's a drug thing since there are lots of places to hide things out there.

[Morgan]

If you're really going to sell the place in two months don't rent it. Clean it and do some minimal work to make it more appealing. 

 

If you think it might take six months to sell, consider it... only if you are really in need of the money. Bad tenants can do a huge amount of damage very quickly. I've heard stories from other landlords about tenants who were doing a rent-to-own deal, and they stole the siding off the building, ripped all the roofing off because they were going to replace it and never did. Not to mention pet damage, plumbing problems, etc. In general I don't let tenants do any updates, painting, anything... who knows what they'll do...

[moustachio]

Something doesn't feel right about this and I can't put my finger on it.  Hopefully when he fills out an application something explains it better.

 

Go with your gut, especially the gut feeling you get from personally dealing with these people. Obviously they might just have rose colored lenses and think it might take a year+ for you to sell, but they might have some silly scheme in their heads that reasonable people wouldn't even be able to guess at... one that probably involves screwing you over. If you get weird vibes off of these people at all then play everything by your own rules.