Considering The Business
Hello all, My wife and I are both soldiers in the Army. I am about to go off to school for the next year to become a helicopter pilot while she will be in the desert. The house next to my parents just went up for sale. My wife and I have been looking for a more aggresive investment strategy. I have been thinking that since it is out in the country, yet close to a private school. I could buy the house and rent it out to students. My family will be right next door and dad is very handy when it comes to fixing things up in a house. The selling price is definetly right. I am just wondering what I will need to know to make this successful. I dont want to get slammed with something that I was not aware of before. I have been told that places like century 21 will manage your property for you...is it worth it? What will I need to do or know before I start? I appreciate your time.
Thanks,Nick
I do have a question about the mortgage. I have not looked to the FAQs yet but should the title to the home be in the companies name? Would I rent the house out or would my company be renting the property out? Where can I find a rental contract that covers things pretty well? This house is in the country and we dont see a lot of scandolous people out there. However it is better to be safe then sorry. I appreciate the help.
Thanks,Nick
Nick,
You want to do a cash flow analysis to be sure that it will positive and you can hold it. If you are thinking of an LLC for liability protection, the property needs to be in the name of the corporation.
There are always issues about getting loans and insurance on properties that are held in corporations. There are some that suggest putting the property in a trust with beneficial interests to your corporation. Part of your decision to do this may depend on your other assets.
Your company would be renting out the property if the title is held by the corporation.
There are lots of rental contracts out there. I would go to local property management companies see what they are using. You may find one that you like or you can create your own by "blending". My rental agreements are about six pages long and cover many contingencies.
Regards,
Ed[ Edited by edmeyer on Date 05/31/2005 ]
Thanks for the advice guys. Is there anywhere on line where I could look at some rental agreements that I could "blend" together? I appreciate all the help thus far.
Thanks,Nick
Nick,
I would go to property management companies in your area. Laws vary from state to state. For example, a pay or quit notice in California is 3 days, in Arizona it is 5 days. I believe you will get much more effective leases from large property management companies than you will on line.
Ed[ Edited by edmeyer on Date 06/01/2005 ]