Absentee landlords

[zenstyle]

The house next to me is a rental, and is currently occupied by a family who just moved in. The Mrs. told me they signed a two-year lease (very happy to hear that; wish it could have been longer.) Anyway, the guy who has owned the house for many years lives out in Caledonia or Jenison or one of those dogforsaken wastelands. The new residents have been trying to persuade him to sell the house to them at the end of their two-year lease. He seems reluctant so far, so husband and I will work on him too, invoking the term "absentee landlord" with as much scorn and disdain as we can muster.

Anyway, is the City actively doing anything to discourage house purchases by absentee landlords, or encouraging them to sell their properties to real residents? What's the picture from you insiders?

[GRguy]

Zen:

I know this may be unpopular with you, but I have a family member who makes her livelyhood by buying old properties, fixing them up and renting them. It provides good places for people to live and provides her with a good income. In your broad paintbrush, she is an absentee landlord.

If the properties are falling down or a danger to the people living there and the neighbors, by all means, go after them. If it is simply someone trying make a living and possibly a retirement, let them be.

Just my $0.02

[terra firma]

"absentee landlord" with as much scorn and disdain as we can muster.

What other types of Landlord's are there ? If they are not "absentee" then it means they live there -- in this case every homeonwer is a landlord.

Someone who owns a building but does not live there, by your definition, is then an 'absentee' and I am guilty for sure.

Since not everyone can own a buildig or home, they must rent. If you do not own where you live, then be grateful for absentee landlords, because we provide the very shelter that you enjoy the benefit of.

[GRDadof3]

"absentee landlord" with as much scorn and disdain as we can muster.

What other types of Landlord's are there ?  If they are not "absentee" then it means they live there -- in this case every homeonwer is a landlord.

Someone who owns a building but does not live there, by your definition, is then an 'absentee' and I am guilty for sure. 

Since not everyone can own a buildig or home, they must rent.  If you do not own where you live, then be grateful for absentee landlords, because we provide the very shelter that you enjoy the benefit of.

<{POST_SNAPBACK}>

I'm not sure what absentee landlords means either. I always wanted my landlord as far away as possible That raises a question I've wondered about. What does "compliant" or "non-compliant" mean for a rental? Are there city codes that GR uses to determine one or the other? Or is it related to something else?

[torgo]

I'm not sure what absentee landlords means either.    I always wanted my landlord as far away as possible    That raises a question I've wondered about.  What does "compliant" or "non-compliant" mean for a rental?  Are there city codes that GR uses to determine one or the other?  Or is it related to something else?

<{POST_SNAPBACK}>

Some apartment leases say that the landlord will take care of snow, fixing stuff that breaks, trash removal, lawn maintanence, etc, etc, and if the landlord fails to perform these dutues, then they are an "absentee landlord" since they are not tending to the property as they should.

Is this term perhaps being thought of as "slumlord" in this conversation?

[zenstyle]

To clarify:

By "absentee landlord," I mean the owner of the house does not live on the property; e.g. a duplex in which both halves are rented out, or a house split up into apartments with the property owner living off -site. I'm not talking about owners of large apartment buildings or complexes.

And ok, ok, forget about the "scorn" and "disdain" bit. Sheeesh! Somebody just answer my original question:

is the City actively doing anything to discourage the aquisition of more property by absentee landlords? And if so, what is the policy?

(...where's that Celexa....)

[GRDadof3]

To clarify:

By "absentee landlord," I mean the owner of the house does not live on the property; e.g. a duplex in which both halves are rented out, or a house split up into apartments with the property owner living off -site. I'm not talking about owners of large apartment buildings or complexes.

And ok, ok, forget about the "scorn" and "disdain" bit. Sheeesh! Somebody just answer my original question:

is the City actively doing anything to discourage the aquisition of more property by absentee landlords? And if so, what is the policy?

(...where's that Celexa....)

<{POST_SNAPBACK}>

I don't see anything wrong with the principle of someone owning multiple single family dwellings (or flats, duplexes, etc.) and renting them out, without living there. It provides a good stream of income, usually provides low cost living for those unable to own, and is better than abandoned houses. With everything, there are good and bad apples. I used to live in a 3 story house in KZoo where the landlord lived on the top floor, and he was the biggest bum I had ever seen If your beef is just that the landlord should live on the premises, I don't think there is a way for that to happen in any city.

[hood]

I always thought an absentee landlord was one who rents out a house ans simply lets it go while collecting rent, no maintenance, and sometimes does not pay property taxes or bills. I have no problem with people who own properties and rent them out without living there, I plan on getting into that business someday, with any luck.

[fishboy]

I always thought an absentee landlord was one who rents out a house ans simply lets it go while collecting rent, no maintenance, and sometimes does not pay property taxes or bills. I have no problem with people who own properties and rent them out without living there, I plan on getting into that business someday, with any luck.

<{POST_SNAPBACK}>

Enough is already being done, not by the city. By banks. Non- Owner Occupied properties require a much larger capital investment ( that means cash ). The lending terms are highly unfavorable. For any brave individual who can pony up the 20 to 30% downpayment it requires to secure reasonable financing that will allow you to offer a marketable rent and have enough cashflow to adequately maintain a property, I say so be it.

[hood]

Enough is already being done, not by the city. By banks. Non- Owner Occupied properties require a much larger capital investment ( that means cash ). The lending terms are highly unfavorable. For any brave individual who can pony up the 20 to 30% downpayment it requires to secure reasonable financing that will allow you to offer a marketable rent and have enough cashflow to adequately maintain a property, I say so be it.

<{POST_SNAPBACK}>

How do you figure that rental units are unprofitable (I think that what you are saying)? Lets say you buy a $50k house, which, in Lansing, is the cheapest you can get a ready to rent house without major repairs needed. You payment on a 30 year, 5.3819% interest, 10% down payment, would be $252 per month. Most of these houses would be 2-3 bedrooms, and just under 1000 sq. ft. you rent the house out at $550 per month, and thats low (I'm sure you could get$ 600-650 easy), your gross profit is $300 per month. Assuming the taxable value is what it should be, $25,000, the annual taxes are $1291, or $108 per month. Profit: $192 per month, and since at $550 per month, the utilities would not be provided and landscaping would not be provided either, that's the profit, $2309 per year, for nothing but letting the property sit there, except for occasional mainenance, which if you do the work yourself would be very cheap.

[peaceloveunderstanding]

the purpose of rentals (for people looking for long term investments) is to make the mortgage payments on the property and then when the mortgage is paid off you can sell the property at market. People who think they will get rich off the monthly payments don't know what they are doing. I personally would not involve myself in rentals since the return rate is quite poor. There are much better investments then real estate today.

[fishboy]

How do you figure that rental units are unprofitable (I think that what you are saying)? Lets say you buy a $50k house, which, in Lansing, is the cheapest you can get a ready to rent house without major repairs needed. You payment on a 30 year, 5.3819% interest, 10% down payment, would be $252 per month. Most of these houses would be 2-3 bedrooms, and just under 1000 sq. ft. you rent the house out at $550 per month, and thats low (I'm sure you could get$ 600-650 easy), your gross profit is $300 per month. Assuming the taxable value is what it should be, $25,000, the annual taxes are $1291, or $108 per month. Profit: $192 per month, and since at $550 per month, the utilities would not be provided and landscaping would not be provided either, that's the profit, $2309 per year, for nothing but letting the property sit there, except for occasional mainenance, which if you do the work yourself would be very cheap.

<{POST_SNAPBACK}>

Hood, Im not saying its un profitable. The financing you outlined is unrealistic for a non-owner occupied property, and lets not forget to loose the homestead exemption on the taxes . My point was to spell out the type of risks most responsible investors are exposed to. If living in an area of non-owner occupied property upsets you, move. But to expect a city goverment to discourage investment is silly. Property is the only industry left in this country.

[hood]

What makes it unrealistic? I forgot about home stead exemptions which would add just under $400 to the taxes. Of course I did forget insurance too, which coulden't be much over $1000 per year, but $550 per month is a lowball rent for even a bad neighborhood these days. And I agree that property is one of the only industries left in this country, that's why I'm going to hopefully get into real-estate as soon as I can afford it. And I'm completly against a government regulating the number of rental units, Lansing attempted a rental moritorium and City Council shot it down quickly. Overall, owning rental properties can be highly profitable, if you do it right, doing your own maintnence is key.

[fishboy]

What makes it unrealistic? I forgot about home stead exemptions which would add just under $400 to the taxes. Of course I did forget insurance too, which coulden't be much over $1000 per year, but $550 per month is a lowball rent for even a bad neighborhood these days. And I agree that property is one of the only industries left in this country, that's why I'm going to hopefully get into real-estate as soon as I can afford it. And I'm completly against a government regulating the number of rental units, Lansing attempted a rental moritorium and City Council shot it down quickly. Overall, owning rental properties can be highly profitable, if you do it right, doing your own maintnence is key.

<{POST_SNAPBACK}>

The rate @5.375 will have an adjustment of 1% for a non owner occupied property, .5% for being over 80% of the homes value, not to mention PMI( and that is with stellar credit and plenty of reserves ). these adjustments cut into an investors bottom line.

[GRDadof3]

The rate @5.375 will have an adjustment of 1% for a non owner occupied property, .5% for being over 80% of the homes value, not to mention PMI( and that is with stellar credit and plenty of reserves ). these adjustments cut into an investors bottom line.

<{POST_SNAPBACK}>

Plus the fact that rates are so low and many people are buying ILO renting, it's tough to find tenants. If you own 10 rentals, but can only rent 7 or 8 consistently, you're lucky if you're breaking even.

[torgo]

Plus the fact that rates are so low and many people are buying ILO renting, it's tough to find tenants.

[zenstyle]

Plus the fact that rates are so low and many people are buying ILO renting, it's tough to find tenants.  If you own 10 rentals, but can only rent 7 or 8 consistently, you're lucky if you're breaking even.

<{POST_SNAPBACK}>

And if this is the case, doesn't it behoove the owner of these properties to SELL some of those properties, so that more people can, in realtor-speak, "realize their dream of home-ownership"?

The owner already has a house to live in. How many more does he "need"?

Oh, lordy, I can hear the squealing now about "rights" and "restraint of trade." Please; I ask these questions honestly, not to be a burr in anyone's saddle.

[fishboy]

And if this is the case, doesn't it behoove the owner of these properties to SELL some of those properties, so that more people can, in realtor-speak, "realize their dream of home-ownership"?

The owner already has a house to live in. How many more does he "need"?

Oh, lordy, I can hear the squealing now about "rights" and "restraint of trade." Please; I ask these questions honestly, not to be a burr in anyone's saddle.

<{POST_SNAPBACK}>

Zen, there are an overabundance of single family homes on the market, not an ideal time to be a seller. If your concern is that your neighbors deserve to own a home 111 new listings went on the market today( get off your bean bag and help them find one). If the landlord is a good steward and keeps the property in good repair, what buisness of yours is it if sells or not?

[joeDowntown]

I've always wanted to be an absentee landlord but I know I would just sink too much money in bringing it back to its former glory and go bankrupt. If anybody knows a way around this, please let me know. Carlton Sheets doesn't seem to want me to follow this principal...

Oh yeah, and I don't like being called about toilets at 3:00am.

Joe