Home › Forums › Closed Forums › Buying and Selling RE › Living next door to your rental income home
- This topic has 11 replies, 11 voices, and was last updated 12 years, 11 months ago by
Hatfield.
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March 12, 2012 at 5:01 PM #19589March 12, 2012 at 5:10 PM #739768
an
ParticipantI would totally do it. It would be much easier to do repair when you can get there in <1 minutes and you can always keep an eye on them much easier.
March 12, 2012 at 5:12 PM #739769Rich Toscano
KeymasterA big benefit of this is that you get to pick your neighbors, at least on one side. And your neighbors have an incentive to get along with you.
March 12, 2012 at 5:25 PM #739770Coronita
Participantdrawback…everytime something breaks ,expect him/her to knock on your door.
March 13, 2012 at 7:13 AM #739802teacherSD
ParticipantI used to rent the house next door to my landlord. We got along well and I believe I was a good tenant.
One thing that can be good for the landlord is that I felt like I should always be on my best behavior. I didn’t want him to see me having a big party or keeping the house a mess.
March 13, 2012 at 8:41 AM #739804jwizzle
ParticipantI also rented the house next door to my landlord, and also was on my “best behavior” since we loved the house and were getting a fantastic deal for the area.
One thing you might want to consider (if you can make this happen) – he wanted us to see him as a our neighbor, rather than landlord (it was the kind of neighborhood where we interacted with our neighbors a lot – xmas gifts on porches and bbqs and stuff). He had us call his contractor friend, rather than him, when we had broken things. The contractor friend usually would be the one arranging to fix things or recommending a repair person anyways, so it made sense for everyone, and there was no barging next door when we needed something.
March 13, 2012 at 9:03 AM #739781NotCranky
ParticipantMy rental is on the same lot, though it is 20 acres.
I had to kick out the first two tenants and that might have been more stressful because of the proximity, but they might have been more cooperative because of it too. I didn’t lose any money or have to evict. They have all taken good care of the place and I wonder if being around doesn’t help with that. None of them were complete freaks, they just wouldn’t follow the rules. See ya.Fixing stuff hasn’t been a problem. I want to fix stuff as soon as possible.
I have great tenants now and as Rich pointed out, that makes for good neighbors.
March 13, 2012 at 9:29 AM #739808poorgradstudent
ParticipantWe used to rent an in-law unit in the University heights area where most of the properties have that arrangement. The owner lived in the front house, although he hired a property manager to deal with maintenance. There were two seriously awkward moments; one was when he passed out drunk in his yard and we had to nudge him to make sure he was alive and breathing and ok. The other was when a guy I can only assume was some sort of collections agent knocked on our door and asked questions about the property owner, mostly when he was normally home.
Honestly though, I agree with Rich; having had some bad neighbors, the ability to pick (and oust!) your neighbor would be a huge plus. Just try not to pass out drunk in your yard!
March 13, 2012 at 2:04 PM #739866Hobie
ParticipantGreat comments, thanks all. I was dwelling on the worst case situation if I had to evict and wives became friends, etc. Just need to be extra prudent in tenant selection. and I’ll watch the cocktails 😉
March 13, 2012 at 2:54 PM #739882UCGal
ParticipantIt’s in our long term plans for our casita. When the in-laws no longer need it we’ll start renting it out. It’s literally in our yard. (Big lot, though, so privacy for all parties.)
The things mentioned here all make sense to me- get to pick the neighbor. We’ll price it so they want to stay – so will behave well.
March 13, 2012 at 3:14 PM #739886Diego Mamani
ParticipantApologies for the commercial, but I strongly recommend this book for would-be landlords:
The author speaks strictly from experience and provides realistic numeric examples when appropriate, and no, I don’t know him personally; I bought his book and have been happy with it.
Going back to the topic at hand, the author recommends being friendly with your tenant, but only up to a point. He says that it’s not good for tenants to know too much about your personal life, which is information they can use to their advantage if they ever decide to sue you for any reason.
Living close by to your rental sounds great, but right next door might not always be optimal.
March 13, 2012 at 5:57 PM #739912Hatfield
ParticipantI agree with pretty much everything in this thread so far. We bought at house in 1999 that was a two-on-one. We weren’t looking to be landlords, but we loved the house and the location.
We’ve been lucky with our tenants, but also very diligent during the screening process. The original tenants stayed on for a year or so. They moved out to buy a house, and at that time we took care of a bunch of deferred maintenance, put in new tile, redid a bunch of stuff. We offered it at a premium, and waited for the right tenant to come along. It was vacant for maybe 2-3 additional months but it was worth it. A nice couple moved in, both professionals, and they lived there for about 8 years.
Screening tenants is super important to begin with, but there is an additional kind of an oddness to being both a neighbor and landlord. So far we’ve managed to keep that line in a reasonable place, but we’re still able to stop by for a glass of wine, etc. Anyway, this couple moved away, and by this time several people in the neighborhood already had their eye on the place, including the couple next door who we knew and liked. So it’s all been great. As before, we’ve very friendly with the tenants but also maintain a distance. It’s a balancing act.
Slightly off topic, a long time ago I was given a piece of advice that you should avoid raising the rent on a good tenant. So after the first vacancy, we raised the rent to premium levels, but then we never raised it again until after they left. The theory is that you lose way more money on the turnover than you get back by nickle and diming people for another $50 a month, or whatever.
I ended up keeping my old house (about a mile away) and that same strategy has worked well there too. Last tenants were there 9 years.
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