If you’re having trouble selling your home in the present economic downturn, there are options. Many people have had their homes on the market for 6, 7, 8, months or more with no offers at all. You may need to sell your home due to a job transfer, divorce, increase in family size or perhaps your payments are too high and you need to cut back. What’s a homeowner to do? Your best bet may be to rent your home out until home prices begin to recover.
Many homeowners are fearful of renting out their homes because of the horror stories they’re heard – unruly tenants punching holes in walls, stopping up toilets, or not paying their rent for months on end, sticking the owner with mortgage payments they can ill-afford. But these problems can be avoided quite simply with a good rental agreement and good management.
Most people who are not experienced landlords prefer to have a real estate company manage their rental. This is a good idea if you are willing to listen to your agent’s advice relating to the pricing of your rental. Real estate agents know the market and will tell you what rental price your home will bring in today’s market. They will manage finding a renter and checking credit. They’ll manage home repairs and eviction, if necessary. The experienced real estate manager knows how to keep renters from “acting out” so you can feel secure in renting out your property.
If you prefer to handle the rental yourself, here are some tips on being a successful landlord.
Before you begin the rental process, get yourself a good rental agreement. Check out some landlord websites that post practical rental agreements and rental application forms you can use. You can also see an attorney for a good rental agreement and application form. Make sure you address things like who takes care of the yard, whether smoking is allowed, whether pets are allowed and if an additional “pet deposit” is required, who is responsible to fix appliances if they break, what appliances are included, etc. Once you’ve found the rental agreement you want to use, the next step is to get a “Move-In Condition Report”. This report addresses the condition of the home and lets landlord and tenant acknowledge the condition of each room of the house. If there is any question of the condition of the property upon move-out, the report will clarify any question. Generally, the tenant must return the report to the landlord within 2 days of moving in to the property.
Next, find a service you can use to check the perspective tenants’ credit history. You can join the National Association of Independent Landlords for a nominal fee and check credit online through their website.
Once you’ve found the right tenant, you’ll have them sign the rental agreement, collect deposits and the first month’s rent, and out the keys. It is a good idea to collect the deposit and first month’s rent in the form of a money order. You wouldn’t want to have a tenant move in to your home just to find their checks for the deposit and rent are no good! You would have to start the eviction process without ever having received any money!
After you’ve received the initial money order at move-in, you may want to allow the tenant to make future payments by personal check. If you ever have a check returned, your rental agreement should specify that all future payments would be by money order.
Finally, it’s a good idea to find an attorney who specializes in evictions. You probably will never need one as long as you manage your property according to the rental agreement, with no exceptions, always being polite with your renters. But if you ever need to evict, you’ll feel better having an eviction attorney in your arsenal.
If you bought your home in 2002 or before – you’re in luck. You can probably rent your home out for a profit, or at least an amount that will cover your mortgage payment. Even if you have to rent your home for $100 less than your mortgage payment, you probably won’t have to go into foreclosure over that amount.
You may be able to afford renting your home at loss if the home you’re moving to has a lower monthly payment than your present home. Depending on your financial situation, renting at a loss of say, $200/month may be better than leaving the home empty, losing the full amount of the mortgage payment each month!
It’s a good idea to look at your complete financial picture before deciding whether to stay in your home, rent it out, or sell for less than you want in this economic downturn. For more information and tips on selling your home, visit http://tampahouse1.com/home_sellers.html