My wife and I just put an offer on a short sale home and we're excited! It's going to be an investment property and hopefully it will pay for our retirement.

We have no experience being landlords. Any advice/suggestion from those of you who are experts?

I can help you on both fronts.

First off the short sale.  Do you know if the bank has already approved the short sale for the seller?  If not then the process could take several months to close.  The bank also has to approve your offer.  If there is a 2nd mortgage on the property, that could be another hurdle.  Ive seen some banks holding 2nds come back at the end and ask for extra money to make the deal work.  if the seller or buyer is not willng to kick in extra money it could be a deal breaker.  Be patient, make sure you ask these questions and you should be able to determine whether or not the deal is even doable.   Again I've seen short sale transactions go for several months only to be killed at the end.  REO deals are much easier, as they are already bank owned and the bank wants them off the books.

Being a landlord is a little like fishing.  You dont always catch a good one.  ;D

I've had great tenants and I've had tenants from hell.  They all put their best foot forward when you're interviewing them, but as soon as they move in some of them turn into a nightmare.  You can take some precautions that will help minimize that.

Have them fill out an application.  Check references.  Why are they leaving their current place?  How many people will be living in the home?  Also make sure you get permission to order a credit report.  You can tell alot about a person by how they pay their bills. 

If you have any other specific questions feel free to pm me.

A friend of mine did the landlord thing and hated every minute of it. In a lot of states, tenants have the upper hand legally in tenant/landlord disputes. Like Robert said, some of them can turn your life upside down.

His stories were eye openers. Days spent in court trying to recover $$$. Renters moving out in the middle of the night. Renters trashing the place out of spite before they left in the middle of the night.....

Of course it's not like this all of the time, but everything has a risk factor to consider.

A friend of mine did the landlord thing and hated every minute of it. In a lot of states, tenants have the upper hand legally in tenant/landlord disputes. Like Robert said, some of them can turn your life upside down.

His stories were eye openers. Days spent in court trying to recover $$$. Renters moving out in the middle of the night. Renters trashing the place out of spite before they left in the middle of the night.....

Of course it's not like this all of the time, but everything has a risk factor to consider.

This is especially true if you're still making payments on the property, or can't afford the mortgage payments if the tenant(s) refuse to pay. It can take several months to get them out, meanwhile you're steadily losing money. Then, to top it all off, they do a ton of damage on their way out. Since renters typically don't own anything, good luck getting any money out of them. Taking them to court and getting a judgement against them doesn't mean you'll get paid, either.

Been there, done that.

Never again. >

Check into your states eviction process while you're at it. The wife and I thought about doing a rental deal on a house we used to own but X-nayed the whole thing when we found out just how long tenants can exercise squatters rights before they're forced to leave.

Thanks for the great info guys.  My wife and I were the first to put an offer on the property as we were to first to see it.  I guess we are excited just going through the process.

As for renters, we already have a couple of people in mind but who knows. 

Home prices and interest rates are so low right now so we're thinking real estate has to be it.  We shall see. 

I have been waiting four months for my short sale. The bank approved the price but still waiting for them to get all of the need paper work going. It is a very painful process...

The reason its so painful is th trail that needs to be followed in order to get it closed.  With many banks, they dont own the note, an investor does.  So it isnt the bank that is making the call, it has to be relayed to whoever owns that particular note.

The only way for a land lord to make money is to bring the property up to HUD standers. Then turn it over to them and you will be able to get your money each month. Renting is a sure way to lose you retirement. I could go own for hours on renting, but it makes me short on breath. With everything said, it all depends where you are located at.

ONLY buy this house if you can afford to make any payments, repairs, and put in the time needed to maintain a house if/when the renters decide not to pay, or something needs to be done.  Suppose you don't have a renter for a year, your water hear pops, and you have to make some repairs where you're living now... feasible?  just something to think about. 

Talk to your insurance agent and make sure you are insured properly.  Also invest in hair dye as you will need it to cover the grey hairs you are sure to get.  That is not meant to discourage you, just make sure youve got all your bases covered.  Also, speak to a lawyer before you put the property up for rent, depending on the laws of your state, you may be better off creating a corperation, with the rental property being the main asset of the company.  Do your homework, and good luck.