Tuesday, May 15, 2012

I'm a Landlady! (For the Next Month)

I've been agonizing over what to do with my apartment for a while. For all intents and purposes, I live with Sweetie, and my apartment had become a place I'd visit to pick up mail, and a storage place for my books and papers, and only very rarely a place we'd spend the night. This of course makes me sad-- it was only a few years ago that I put so much effort into buying my own place, and then got such pleasure out of living there, after all the years I'd spent in my super-tiny rented studio. But life is full of surprises, and here I am.
When I bought my place, I knew I could afford it, and I budgeted my life around having my own apartment. I could pay all the costs and still save money. But of course, the less I actually used it, the more I started to feel like it was crazy to be paying for it. I knew I should try to find a way to make some money from it, but there has just been such a strong force of inertia keeping me from doing it! If I was to just rent the place out unfurnished, I'd have to pack up lots of stuff, throw out lots of stuff, sell lots of stuff and perhaps pay to put stuff in storage-- all in all, a big pain. And then what would I do when my sister's family came to visit? Sweetie's place has a second bedroom but it's not idea to have a family of 4 visiting-- it's been great to just give my sister's family my place while I stay with Sweetie.
I've thought about trying to sell my place and buy a studio somewhere near Sweetie, but the neighborhood is more expensive, so I might end up having to pay even more for a smaller space I'd only use part time.
I realized that the ideal thing, at least during a transition phase, might be to get a roommate or sublet my apartment on a temporary basis. When I was homeless for a few months before being able to close on my condo, I'd had pretty good experiences with a couple of month long sublets--but I know that I am very neat and clean and respectful of people's belongings, and I wasn't sure I could trust other people to be equally neat and clean and respectful of mine. I was nervous about having strangers in my home.
But as soon as I started talking a bit more to friends about this dilemma, guess what? It's not that hard to find a friend of a friend who needs a place in NYC. I had one potential "roommate" situation that fell through because the person's job offer didn't work out, but soon after, a situation came up where someone needed a place for a month, and this time, it worked out. I've handed over my apartment for a month in exchange for $2,000.
We'll see how this works out, but I'm feeling optimistic. Most of my clothes were already at Sweetie's, so all I had to do was bundle up a few more bags of Goodwill donations in order to empty out my whole closet and dresser so I could give the subletter an empty bedroom. I tidied away a lot of my toiletries and personal items but left all my furniture and posters in place. One whole closet is full of stuff, including some boxes of old papers-- I've realized I'm a bit of a hoarder in some ways-- but I moved all my sensitive documents such as tax returns and financial info.
The $2,000 should be a nice little profit for the month-- my out of pocket costs for the place, including utilities, is only around $1850 or so, and much less if you factor in the tax deduction and the fact that a few hundred of that goes towards my equity.
So unless this turns into some nightmare where these people trash my place, I may have crossed the threshold into being able to do this more often and turn my apartment into a real estate investment. I could list it on sublet.com or airbnb.com and probably make even more than the $2,000 I charged this time. (Though I'd rather have trustworthy people and not get too greedy...)
Readers, have any of you had good or bad experience renting out your home on a short term basis? I'd love to hear any recommendations...


Squeezer said...

There is a house in floreclosure near me that I have thoguht about buying, fixing, and renting. It needs minimal work. However, where I live, various permits and inspections are needed which has been putting me off.

My Frugal Miser said...

What a timely post. Even though I earn most of my income from landlording, I've never rented the house I live in. This summer I intend to move to Florida. Since I don't know how permanent this move will be, I've been trying to figure out what to do with my current residence. The biggest issue I'm dealing with is whether to rent my home with a traditional one year lease, in which case I would clear out all my possessions, buy new carpet and touch up the paint, or whether I find short term renters and do something less drastic with the house. I like the idea of using airbnb but worry my tastes are too frugal to appeal to most people.

Keep us posted on how this first experience works out for you.

Anonymous said...

My Brooklyn co-op doesn't allow sublets for less than a year, and even then the subletter has to interview with the board, organize financial paperwork, etc. Just one more reason I wish I owned a condo. Friends in L.A. have had good experiences apartment-swapping with people in Europe to save on hotels abroad and in short-term sublets through airbnb. Read Ron Lieber's NYT columns about airbnb and liability/insurance issues.

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MoneyMateKate said...

Too bad your place isn't in Manhattan... I'd be all over that arrangement (my blog post this week - http://wp.me/pkNIi-qs - explains why).

Good luck!!

Investment Property said...

I am glad I read this interesting post. Nice blog.

Anonymous said...

Thank you very much for keeping open and honest discussion.

I think $2,000 is worth a lot and will contribute additional $14,000 towards your annual goal.

Crystal @ Prairie Ecothrifter said...

We have rented out our third bedroom in our house for 2 1/2 years of the 5 that we've lived here (Houston, TX). In fact, we have a couple of friends living with us now. I think it's awesome. We are having our dream home built right now and our friends are moving right along with us in a few months when it is ready, and we'll be renting out our current home too. Overall, we'll be bringing in $1800 and paying out $1600 in mortgages. We'll just be paying property taxes and utilities of our new home too. Not bad overall. :-)

Bryan said...

My ex had hers rented but the problem is she had a hard time letting the people who rented move out of the house. The renters were friends of her family that's why when she let them move in, there was only a verbal agreement that they'd be renting the place for this amount for this number of months. But during that time when she wanted them to go, they refused to leave. What's worse is that they didn't take care of the place that well.

So make sure you prepare a written contract that you/they can like renew every year.

Good luck!

"Tom" said...

Thanks a lot for sharing such a wonderful piece of writing with us. It was much needed for novice like me. Got to learn a lot and will surely incorporate them in my personal life at times of difficulty.

Connecticut Blogger said...

There is a website (probably more) that hooks up people needing short-term rentals for a variety of reasons (people changing jobs, people doing a longish vacation and preferring to stay at a home rather than a hotel, etc etc) and people willing to open up their home, a wing or even just a spare bedroom.

My computer crashed a few months back and so I don't have the link, but you should be able to find it with a creative online search.