Becoming a Landlord

[DJ]

Hi Everyone,

My plan is simple enough; I hope to purchase a house at a discount (obviously) and then rent it out and earn positive income.

What are the pitfalls involved?  The former owners occupying the property could be one issue....has anyone tried to rent it back to the former owners?  I understand one solution is to offer a lump sum amount to vacate (how much are we talking?)

Is it possible to do a home inspection during the tender process?

Has anyone tried renting a house in a small town (5,000-25,000 people) and if so, what was your experience?

Thanks in advance for your help.

[RichD]

A house will always rent out for the right price. You'll need to do your homework and see what other houses are for rent in the area in question and see if you can afford to rent it out for what their renting for. My experiance has been only in smaller towns and for the most part I would strongly recomend it. You'll always have issues croping up, but so long as you can set yourself up in such a way that when these issues do crop up your ready and able to deal with them. (both physically and emotionaly).  You'll agree that being a landloard is very rewarding. I would however recomend giving some seriouse thought befor buying a property that is any distence away from home. This comes back to setting your self up right If you get a call at 7pm on Sat. night of a long weekend from your tennent saying they don't have any hydro, what do you do?
Any way the what if and or buts aside there are plenty of things you can do to minimize the risk, money and headaces. You can't however eliminate them.
If you want to talk send me an Email and I can give you a few tips that I'v picked up over the years. I'm no pro. but I do have some experiance.
Rich 

[speedfreeksteve]

Hi Everyone,

My plan is simple enough; I hope to purchase a house at a discount (obviously) and then rent it out and earn positive income.

What are the pitfalls involved?  The former owners occupying the property could be one issue....has anyone tried to rent it back to the former owners?  I understand one solution is to offer a lump sum amount to vacate (how much are we talking?)

Is it possible to do a home inspection during the tender process?

Has anyone tried renting a house in a small town (5,000-25,000 people) and if so, what was your experience?

Thanks in advance for your help.

Your first question kind of made me scratch my head. First of all do you think it's a good idea to offer renting a place to people that couldn't afford to even pay their taxes? Personally I would never rent to someone with a poor credit history like that. You don't need to pay them anything to vacate. Contacting police or a lawyer will take care of that, but it may take some time.

Asking about the home inspection makes me wonder if you understand the tender process. You are basically bidding on the right to evict someone and takeover their home. Until the process is complete they are the lawful owners. It's not likely that they are going to allow you on their property let alone inspecting it.

One small town to the next will vary. There is also a big difference between a town of 10,000 and a town of 25,000. I have acquaintences that have rented out their properties in small towns with mixed results. The seemed to either get hard working people that were perfect renters, or deadbeats that failed to pay their rent after deciding all they cared about was spending every last dime on Oxycontin pills. More often than not renting in small towns is dicey, and you'll have less prospective renters and usually less quality ones to choose from.