Not everyone's fit to be a landlord

Homeowner on fixed income learns downside
By: Ilyce R. Glink: Inman News
Q: I dread being a landlord. I am a 68-year-old disabled veteran and have moved into another home. I have had to rent out my other home because I couldn't sell it.

One of the tenants wants to break the lease because she and the other female tenant cannot get along.

I am also on a fixed income and do not want to have to hire an attorney. Do you have any suggestions for me?

A: You're a perfect example of someone who should not be a landlord. It appears you don't have the temperament or financial wherewithal to handle the problems associated with renting property. Unfortunately, you were forced into being a landlord because you couldn't sell your house.

Make it a goal to get the property sold as quickly a possible. For now, tell your tenant she is legally liable for the rent and that you will pursue her legally if she skips out. If she's unhappy, have her find a replacement tenant.

I'm sorry that you don't want to hire an attorney, but you're experiencing a fairly common landlord experience. Please seek legal advice. You may also want to check out any of the excellent books on being a landlord from Nolo Press. You should also check the terms of your lease. Many leases allow you to recover your attorneys' fees should your tenant default under the lease.

Q: All I have ever wanted is a small piece of property -- as little as a half an acre with a shack -- in the northern mountains of North Carolina.

Is there any way I can buy without a down payment? I had $4,000 saved as a down payment, but I've had to use it on family medical bills. I am saving again for this purpose, but it is so slow.

A: Unless you're a veteran (with access to a VA loan), it's difficult to get a zero-down-payment loan right now. In fact, home buyers with cash for a down payment are having trouble finding mortgage lenders who want to close on their properties at a fair interest rate.

You'll have an easier time of it if you even have 3 percent of the purchase price, which can entirely be a gift from someone else (if you have someone with means willing to gift you the cash). Then, you can qualify for an FHA loan (find out more at www.fha.gov.)

I'm not saying you can't get a loan with zero down, but you may pay a higher interest rate or more in fees. Start shopping around with loan lenders and see what they say you can afford. The key thing is to not get yourself into a situation where you can't afford what you own. Bankruptcy is expensive and will trash your credit.

Q: When I applied for a loan the lender took advantage of me. I paid $7,000 to lower the interest rate to 5.25 percent, but he printed the mortgage documents to show that the rate is actually 5.75 percent. What can I do after closing?

A: You should have caught this at the closing and refused to close until the proper paperwork came in.

If you have this deal in writing, you can go back to the lender and show them that they made a mistake. Otherwise, you can complain to the department that regulates mortgage lenders in your state.

Q: I am excited about the fact that my house is going to be paid off in three more years. Do I need to make any changes to my home insurance policy because the house is paid off? What about changing my will?

A: Congratulations on closing in on your pay-off day. The answer to your question is "no." You don't have to change anything to your insurance policy or will (provided that you have a valid will).

If you haven't done it recently, you may want to update your insurance policy now to reflect the higher cost of rebuilding your property if a disaster happens. Call your insurance company and ask them to come out and reassess your property for rebuilding costs.

You should have adequate insurance for your home whether or not you have a mortgage on the home. A lender may require you to carry insurance, but it's prudent practice to carry insurance and to make sure that you have enough insurance and the right kind of insurance for your home. You really should reevaluate your needs every couple of years.