Renting Out Your Home Is Not For The Timid? 4 Reasons Not To Believe The Neighbors
Due to the tough home sales market, some home owners have been thrust into being “accidental landlords”. Their homes won’t sell for the prices they need, they have to move, and they can’t afford to keep them empty indefinitely. So, left with little choice, they will (reluctantly) start the process of renting their homes out.
They start with strong intentions, but then fear takes over! After research which includes talking to neighbors (who all have friends and long lost relatives in the “rental know”) and watching multiple episodes of “The Wire”, they are not sure they can go through with it. There’s so much uncertainty! And risk!
After many web searches, their definition of a “tenant” morphs into:
“A class of unruly persons, usually insatiable smokers, who have extensively studied the art of home destruction and rental payment evasion; commonly known as ‘slackers’ and ‘apathetic deadbeats’, renters have been known to spill drinks and never clean them up, loosen automobile oil pans so driveways become marked for life, and run surreptitious animal compounds (without signing a stringent pet policy disclosure).”
That’s scary!
So, what should fearful home owners do? I’d recommend a few deep breaths for starters. Then let’s look at some facts:
1. Roughly 35% of the population rents currently. Many of the nice places we go to regularly are rentals. I can confidently tell you that a third of theUSpopulation is not bent on home destruction. If you believe they are, sell everything you have and buy stock in Home Depot and Lowes.
2. You have lived in a rental at least once in your life (and probably work in one!) and you consider yourself a good, responsible person.
3. Everyone has a “bad renter” story because the “good renter” stories are boring. It’s like how no one talks about all the airplanes that take off safely everyday, everywhere in the world thousands of times; you only hear about the rare occasion when one plane doesn’t.
Example:
Jim: Hey, my tenant paid on-time and in-full yesterday.
John: That’s great (yawn).
4. Being in the business, I can tell you that most people have pride in their homes. They don’t want to be dodging evictions- they feel embarrassed when they can’t provide for their families. They want their home to look nicely- it’s embarrassing when guests and family come over and their place looks disgusting. That includes smoking indoors (people don’t like visiting homes where there is a smoke smell indoors and most parents want their kids to have healthy air to breathe as well) and out-of-control pets (will most self-respecting people accept living in pet filth?).
Are some tenants more meticulous than others? Of course! But the large majority of tenants are fine people who pay on-time and treat their rental homes with respect (this is especially true after professional tenant screening checks!). The tenants just want to live their lives in peace and have home repair issues addressed in a timely manner from time to time. Their lives are not about getting one over on the owners of the rental homes they live in; it’s just a place where they live for the time being.
Don’t believe the hype. And breathe. Even the timid can safely rent out their homes no matter what stories your neighbors tell you!
Brett Furniss is the President & Owner of BDF Realty (“Charlotte’s Most Innovative Property Management & Investment Company”), and Rent-To-Sell Realty (“When You Need a New Solution to Sell Your Home”) which specialize in rent-to-own (lease options) and rent-to-sell homes. His newest book, A Real Estate Agent’s Complete Guide to Representing Rent-To-Own (Lease Option) Tenants (Delight Clients, Fill Vacant Homes, and Earn $2,250* Upfront! (*Minimum!)
Learn MoreCharlotte Property Management Weekly: Rent-To-Sell Your Home? Best Time is Now
“Wow! How disingenuous! Could you think that because you create rent-to-sell transactions for living? Isn’t that like asking a barber if you need a haircut?”
At least that’s what I’d be asking as a reader. We live in a skeptical age, and that’s okay.
Let’s start with a story:
An average man meets a beautiful, energetic woman. He is taken. “If I could spend the rest of my life with her,” he thinks, “My life would be complete and I’d truly be happy! Just having her on my arm…” He knows he wants to marry her.
So why doesn’t he just ask her point blank? That answer is easy. She’d think he was crazy! She doesn’t know anything about him; and the one thing she knows is that he isn’t that attractive! There are much better suitors out there! So what does he do?
He courts her. He asks her on a date. He asks her on many dates. He buys her flowers, takes her to expensive restaurants, listens to her stories, compliments her, and tries to show that he is an amazing man. She doesn’t fall in love with him at first, but day by day, she grows fonder and fonder of him.
Then, sometime later in the future, when she is vested and knows (almost) everything about him, she professes her love. And, at that point, he knows he is close to getting what he has wanted since her first laid his eyes on her. He picks the right moment and proposes. And she says, “…Yes!”
I’ll take a short pause so you can collect yourself, grab some tissues, and kiss your spouse.
This story is just like rent-to-sell (okay, huge transition here!). Home owners want to sell their homes more than anything. Buyers are scarce and selling in a short time period for full price is almost impossible. Cheap flings (focus on “cheap”) are the rage as neighbors’ houses are being sold for half price (short sales and foreclosures). Home owners are desperate and have to give their homes away and accept the consequences of future damaged credit.
Home owners just want to sell their homes, much like the man just wants to get married. But, with this economy, the reality of that happening quickly on good terms is almost crazy. So what to do?
Rent-to-sell (placing rent-to-own tenants into vacant homes for sale) is the courtship process. These tenant-buyers get to live in the house, work on improving their credit scores, make the home improvements they want, and work on building up a down payment so that they can buy (when the time is right).
And why is it the best time now to rent-to-sell? This is simply because the banks will have to lend more money out in the future! This stagnant housing market is killing their earnings. They will need to find a way to jumpstart this part of the business by lending to responsible parties (aka like tenants who pay their rent on time for 1-3 years, have improved credit scores, and a nice down payment?).
The time to put rent-to-own tenants into vacant homes for sale (rent-to-sell) is now. When the tenants are ready to buy, the future market should be looking a lot better for successful (loan and sale) consummation!
Brett Furniss is the President & Owner of BDF Realty (“Charlotte’s Most Innovative Property Management & Investment Company”), and Rent-To-Sell Realty (“When You Need a New Solution to Sell Your Home”) which specialize in rent-to-own (lease options) and rent-to-sell homes. His newest book, A Real Estate Agent’s Complete Guide to Representing Rent-To-Own (Lease Option) Tenants (Delight Clients, Fill Vacant Homes, and Earn $2,250* Upfront! (*Minimum!)
Learn More