For the last month, I have been conducting my second renovation on our rental home in Alabama. As I had feared and had heard, we had a less than stellar renter experience. After toiling away on all the thousands of dollars of work in the hot Alabama sun, I could not help but think how awesome it is that I live in a small space with little that can go wrong. But on the other hand, I was kicking myself because we had all the stress and financial strain of owning this other house when the whole point of living fulltime in an RV is to not have that very stress and expense!
In order to make myself feel a little better, I decided to list the pros and cons of whether to rent or sale your home when are deciding to become fulltime RVers and to give you some insight into the experience. Here are my thoughts:
Pros of renting your property:
Income: Depending on were you live, you can charge hundreds to even thousands in rent. You can pay off your mortgage or pay your RV payment! Who doesn’t want that?
Stabilization: If the fulltime RV life turns out not to be your thing, you can always return home.
Livelihood: If life gets hard, having an asset like a house to take out a collateral loan or do a reverse mortgage is nice insurance.
Sentimental value retention: Our house was literally where my husband’s family grew up, so it’s been in the family almost 40 years with three generations spending time there. It is so great to still have that property and those memories!
Veteran discounts at Lowe’s: I cannot write this blog post without giving a non-sponsored shout-out to Lowe’s and their 10% discount to veterans. They have literally saved me thousands of dollars, and their staff has been so helpful in navigating the unknown parts of renovations (and they let me bring my pet dogs inside too!). If you are not a veteran and you want to save by do your own home repairs and improvements, their staff can advise you for free! Simply take good photos and measurements of what you are trying to do and presto! They magically seem to know what you need! (Note to self and to whom-it-may-concern: Stop dreaming that you are Chip and Joanna Gains on hit TV Show “Fixer Upper.” They have 50 contractors doing the hard labor behind the scenes. A two-person renovation is hard, hard labor!)
Cons of renting your property:
Financial strain: If your home is old and needs repairs, and unless you put something in your lease that says if they break it, they pay for it (like a water heater or septic tank), you are paying for all that and/or the insurance deductible. Regardless of how awesome your renter may be, you are going to have to repaint and do small repairs when they move out and even possibly during the term of the lease. If you are out of town, this is a huge inconvenience, and you may not be able to travel there or take off work to remedy the problem. If you do not have extra money lying around to pay those costs, or you need the rental money to survive, just sell your house! It is just not steady income sometimes.
Property Management: We did not want to pay for a property manager, and we were out of town most of the time, thus we did not really know how bad the property had become (or we were in some serious denial). A property manager could have fixed that, but I had heard about poor property managers and that were not worth it. Looking back, I still think we would not have changed any of the expenses, but it would have put that buffer between us and the renters. Maybe we would have felt freer to demand the terms of our lease and not have felt like this was a personal attack on us. You will have to judge your own will power and personal strength when determining your own business tactics.
Lease issues: I paid about $100 for legal software, Legal Zoom, to draw up my lease, and it was very thorough, but a lease is worthless without enforcement. I did not require renter’s insurance in the lease, and I stated we would pay for things that broke around the house at “no-fault” to the renters, but predictably things are going break with time, and though it is very clearly “their fault,” you will pay. I offered to reduce rent if the renters did agree to do home improvements to incentivize them to help with the upkeep, but it did not end in my favor; no improvements were done. (Remember: Renters have more rights than landlords in most states, counties, and municipals.
Listing: I posted our property on Zillow and boom, my phone was ringing instantly with potential renters. Dealing with people coming to see the property and determining if they were good candidates is stressful. When I finally decided, one couple was anger I did not choose them since they asked first, but I was under no obligation. However, I still lost some sleep over the decision after the harsh words. I also didn’t have access to a credit or back check on any of the potential renters, and I was picking based off my gut and that is just not good business practice. I am going through the litigation process to recoup what I have lost, so I will keep you posted if my lease was worth its $100, because my gut was not. (Note: I lost the pictures I put on Zillow of our newly renovated home so be sure to save those pictures elsewhere because Zillow lost/deactivated my account and I needed the pictures for court.)
Maybe I’m just negative, but the cons far out way the pros in our case, but yet here my husband and I are renovating in order to try rent again. I have really only broken even over the last three years with all the renovation costs. The only thing we are doing differently is not putting the most expensive appliances in the house, but we still take pride in our improving our property. Maybe we will recoup our losses and finally draw a profit, but newbie landlords beware!
