Can't Sell Your Home? Why Not Rent it?

Can't Sell Your Home? Why Not Rent it?


It may not always make sense to sell your home. If that's the case, renting it could be a good option. But understanding the rental process and using expert help will alleviate extra stress.

Dr. Danielle Babb is the author of The Accidental Landlord. She shared five top tips for homeowners who are considering renting their home.

Emotionally disconnect from your home. As you can imagine, this can be a very difficult thing to do -- especially if you've lived in the house for a long period of time and maybe your kids have grown up in it -- but it's an important step.

“It can cause some emotional distress and you may find yourself too attached for the new tenants liking and their privacy rights. When you make the decision to rent out your home, it needs to feel similar to how it would if you were selling it to someone else,” says Babb.

Screen your tenants. Don't fast forward to thinking about having wonderful tenants in your home so much that you skip over the screening process. Attending to this process alone, can eliminate huge headaches in the future.

Babb cautions landlords about scams aimed at landlords who don't screen. “There are actually "professional tenants" out there that do nothing but find susceptible landlords, usually those renting without a management company, that don't screen tenants. They will give a deposit, and live rent free (not paying rent), knowing you won't know what to do or how to kick them out,” says Babb.

She outlines several steps in her book that help landlords learn more about removing tenants but she says, “The most important thing is not to let the bad ones in to begin with.”

Babb says in her book as well as on the Landlord Protection Agency website there are screening worksheets that help landlords know what types of questions to ask and what red flags to look for.

“For instance, are they not taking care of their car? Maybe they won't take care of your house either and make sure you call those references! Compare what they tell you to what is on their credit report, and make sure you do a credit and background check. Know who you are renting to, and don't be afraid to say no,” says Babb.

Know the law. There are specific laws to protect the tenant. How much the tenant is protected differs greatly from state to state.

“The laws you must abide by are the laws the home is in. You have to tailor your lease or rental agreement to that state's rules. You can easily find these on the Landlord Protection Agency site and then modify the lease agreement accordingly,” says Babb.

To learn more visit the LPA: thelpa.com

She says, “Common changes are how much notice you must give for them to vacate, the maximum deposit you can collect, and notifications for entrance.”

How much rent? “It's easy to say, 'Okay, I have $2000 in expenses, Ill charge $2100,'” says Babb.

But just like when selling your home, it doesn't work that way.

“The market may only bear a rental comp of $1500. You have to make the decision if that $500/month is worth the long-term gain or whatever your initial reason was for holding rather than selling,” says Babb.

Real estate agents can be a great resource for helping to determine what the best rental price should be. They can show you homes in the area that are also for rent and, just as when selling, taking a look, or at least, driving by the homes gives you an idea about the competition.

“You may get more if you leave it furnished; sometimes you can lease furniture and up-charge and make a profit on it, particularly in areas where young families are starting out or college students frequently live. Just be sure you price it right -- all of those extra months on the market eat into that profit or breakeven point. No matter what, be sure you collect a sufficient deposit -- usually one months rent, plus a pet deposit and additional monies for other reasons, like appearing to be a risky tenant,” says Babb.

Who is responsible for what? Important, but tricky question. Depending on which side of the fence you sit, you, of course, may see this differently.

Babb says, “If something breaks, you have an obligation and lawful duty to fix it immediately if it affects quality of life or poses a hazard. But, if the tenant just wants something upgraded, that isn't a requirement. You have to walk the line between having your tenant stay long term because you're easy to work with and paying too much for little things. You can let the tenant make upgrades that they pay for if you wish.”

Babb adds that incentive programs also help a good tenant to stay longer. “For instance, I give my tenants a discount off rent coupon if they pay 5 days early and pay direct deposit. This saves me considerable time.” She says landlords should beware of partial rental payments such as a tenant paying only $100. “If a tenant sends you a partial rental payment, say for $100, and you cash it, it may start the clock ticking all over again on evictions! These are the types of things that professional tenants do.”

Renting doesn't have to be a scary process; it does have to be a well-researched and carefully planned process to ensure the best outcome for all.


If you are interested in renting your home feel free to call or email me. We have a top notch property management division.

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The Online Business of Being Social!

The Online Business of Being Social

There’s no question that the Internet has revolutionized the business of real estate. According to the 2008 National Association of Realtors® Profile of Home Buyers and Sellers, nearly nine out of 10 recent buyers used the Internet in their home search. But now, a new revolution is taking place. A small but growing number of home buyers are taking advantage of social networking Web sites like Facebook and MySpace, as well as video hosting sites such as YouTube when searching for a home, and according to [your association name], Realtors® are using these tools to reach today’s home buyers and sellers.

“Realtors® are industry innovators. At its core, real estate is grounded in relationships, and social networking combines the high-tech of new technologies with the high-touch of real estate. It makes sense that Realtors® are leveraging these new resources to help them connect with buyers and sellers.”

A recent Harris Poll revealed that 48 percent of adults who are online have a Facebook or MySpace account. While many maintain these accounts for personal use, others use them for professional networking. For example, the National Association of Realtors® has its very own Facebook page with just under 15,000 fans. NAR’s research department also has a Facebook page where both Realtors® and consumers can access the latest research and data findings.

Blogs are another popular social networking tool Realtors® use to share information and keep themselves informed on the latest news affecting the industry. On sites like ActiveRain, Realtors® can share useful tips and industry insights with potential buyers and sellers. Realtors® also post blogs on REALTOR.com; consumers can find blogs from Realtors® across the country at http://talk.realtor.com/.
“Given the Internet’s convenience and round-the-clock accessibility, it’s not surprising that more and more consumers and Realtors® are connecting online. As the social networking universe expands, Realtors® will continue to find innovative ways to serve their clients and customers, and build their businesses.”

“The best thing about social media is it can be tailored to fit the needs of the user. At its most fundamental, online networking is simply another way to communicate, and Realtors® have an opportunity to make it work for their businesses and lives.”