I recently advised one of my sellers who had been on the market since July to consider pulling his home off the market and renting it out. This particular seller, whose home had been adversely affected by a number of foreclosures in and around his neighborhood, had taken a job transfer out of state and was essentially making "double payments" while waiting for his home to sell.
The home, a cute three bed ranch with a full basement built in the 1970s, was clean and neat. It was well cared for and priced about 6% below what my client paid for it (when he worked with a different agent) three years ago. And while we got a fair number of showings and generally positive feedback about condition, the bottom line is that there were similar models in the area that sold for less because they were bank-owned.
It was frustrating, because circumstances beyond my client's control were affecting his ability to sell.
When he made the decision to pull his home off the market and rent it, perceptions almost instantly swung 180 degrees. Prospective renters swarmed for the property, with multiple rental applications coming in within hours, not weeks.
My client was able to get almost $200 more per month than he originally thought possible, with a full security deposit and a two year lease. And by refinancing in the low 4's, he lowered his mortgage payment to where he now has positive cash flow on his former residence.
Every situation is different, and I'm not universally advocating that sellers should pull their homes off the market and rent them. Not at all. Landlording is not for everybody, and there are potential costs and headaches that should cause you to think long and hard before you offer your home for lease.
But the incredible rental market we have today is going to be around for a while, and we will see the number of landlords (both willing and reluctant) continue to increase as the home ownership rate drops.
If you are an investor, you already know about this market. But if you are a homeowner with an urgent need to move, landlording may be a viable consideration.
I've got excellent property management referrals in all areas of town. If you are considering renting your home, let me put you in touch with someone who can help you get educated about the pros and cons.
