From Homeowner to Landlord
We have lived in our one family townhouse with room mates/friends since we bought our house in 2008. Now we are looking to move out and rent it out to them. They have always been very responsible and reliable, and hopefully that won’t change. My question is about all the legal changes that are going…
We have lived in our one family townhouse with room mates/friends since we bought our house in 2008. Now we are looking to move out and rent it out to them. They have always been very responsible and reliable, and hopefully that won’t change.
My question is about all the legal changes that are going to take place now. Our current insurance company is Interboro and they don’t do landlord insurance. I need someone good and who will get back to us asap. Is it a similar deal with homewoners ins.? There is an inspection, and they take pictures i am assuming? Is there any advice you homeowners-to-landlord can give me about this? We put in smoke detectors, etc. But is there something I haven’t thought of. Also, will we have to change the C of O on the house? The taxes change too but who do notify of that?
What other legal issues are involved? And if i pay all the bills on the house then is that tax deductible?
I will take any insurance company recommendations! And other suggestions are most welcome too.
Thanks!
I should add … we’ve done business with Alan Wheeler at State Farm for years and never had reason to complain. We’ve alway sent friends to him as well, and when there was a serious fire in the building friends were renting in, the State Farm inspector who came through pointed out that they’d need to do at least X loads of laundry and spelled out various other expenses it hadn’t occurred to them to ask reimbursement for. I was pretty impressed over all.
http://alanwheeler.net/
Get your hands on a good legal guide:
http://www.worldcat.org/title/every-landlords-legal-guide/oclc/181424163
http://www.worldcat.org/title/new-york-landlords-law-book/oclc/51607524
Don’t be afraid to sign contracts with friends. Talk the terms through and read the contract to confirm that the letter of the contract is consistent with the spirit of your friendship and verbal communications. And then sign it.
got the lawyer. thank you for listening. hope for all to be resolved and go with the most clean cut legal version of things possible!
I think you should talk to a lawyer, both about the insurance and the landlord issues. You’ll spend a couple hundred bucks, but it will be worth it. I think this is advice beyond a message board since your situation is complicated.
I’d wonder about “leaving a house” for your son that you don’t want to live in right now. It might be sentimentally on target, but is it really practical in the long term? If you sell, you will have the money, and you can leave it for your son in all kinds of ways.
we are landlords and the hassles are not immense. I think your plan can work but you should settle with your insurance company and handle landlord thing like a business. professional input is a good idea.
ok, thanks for your responses. i don’t have a problem with the friends. since i have lived with them for many years and have had no problems it shouldn’t start now.
the reason i am asking about insurance is pretty complicated:
we have lived in the house with friends. we filed a claim about our roof after the tornado ripped through my corner brownstone. the insurance company got pissy when they came over to the house and saw that it’s not just us living there. they still have not paid the claim. luck of all worst possible lucks, a month ago someone claimed to have fallen on the sidewalk outside our house and the insurance company being unhappy with that too, sent an investigator over to interrogate us for five hours and take pictures of every room asking me for every name of any one who has ever lived with us. currently, both are still pending.
we have considering moving to get my son in to a better school and be closer to family. we love the house and have always taken great care of it (new roof, brickwork, gutting basement, plumbing, etc.). We want to keep it for our son in the future at this point and don’t mind the hassle of landlords.
As far as April… we already filed. no problems. i am just feeling really paranoid that there is a right and wrong way to move out of your home and rent it legally. I also need insurance that i can trust, but it’s hard to secure with a pending claim, or so i have been told by my broker at interboro.
Any more input? I really do appreciate it.
Never rent to friends, family, friends of friends of of family. This needs to be a arms length business transaction. Do not say you have not been warned. At the very least, run a credit check on your friend. If they are offended, that is their problem. Just because they are your friend doesn’t mean they pay their bills.
April 1st, anyone?
I’d say there are too many questions you raise and worries you have, sell the house, landlording may not be for you ;).
Why is getting insurance an ordeal? It was a no brainer the few times I got it. Why would you even think about changing the CofO?
Tax issues are common sense but if you can’t figure it, best to check with an accountant. Expenses, insur, interest, are deductible. Large sum repairs and improvements are depreciated, as is the house itself. You will wind up with a tax loss.
You don’t notify anyone of taxes! Wait ’til they inform you. I don’t think taxes change when it’s a rental, but there I believe ignorance is better than knowing.
Now renting to friends..I’m surprised you have not gotten a load of negatives on that yet. I say it’s no big deal.
Hi,
Many companies offer the type of coverage you are looking for. The policy will cover the building as “commercial” because it is tenant occupied. There is normally a drive by inspection where the most common request (if any) is sidewalk repair.
As for bills, you should speak to an accountant but the majority of expenses and any improvements are deductible. I believe cetain expenses need to be spread over a few years.
I am an insurance broker and I would be happy to shop quotes for you. Feel free to call me.
-Will Smoltino
Narrows Insurance Agency, Inc
718-745-1500