Resale Homes
Resale Homes
Renting home they once owned reality for some Americans
Michael Bennett used to own his home in Chesapeake, Va. Now he rents it, which is taking some getting used to.
There are advantages. "If something goes bad -- the hot water heater or the air conditioner -- the people that own the house pay for it," says Bennett, who lost the home to foreclosure a year ago.
On the other hand, "I don't like saying I'm renting."
Bennett and his wife, Candace, are among millions of Americans who have become renters again after foreclosure. While the transition from owner to renter can be difficult, real estate experts and financial consultants say it also can be an opportunity to change some things for the better.
Some of their suggestions on how to make the most of renting after owning:
First, decide whether you want to rent an apartment, condo or house. But people who have gone through a foreclosure may have an easier time renting directly from property owners than from apartment complexes, which tend to place more emphasis on credit history, said LaToya Irby, who offers financial advice on the website About.com.
Use this time to save money and repair your credit, now that rent is often lower than a mortgage payment for comparable dwellings, said Ralph Roberts, who wrote "Foreclosure Self-Defense for Dummies." Renters should stay current with bills and reduce credit card debt, he suggested.
"That's the plan," agreed Bennett, 56, who hopes to be a homeowner again some day. He and his wife bought their home in August 2007, but then racked up medical expenses after he lost his job and health insurance three years ago. They fell behind on mortgage payments.
The Bennetts, who now rent the home they lost in foreclosure from the investment company that bought it, hope to relocate to a more affordable area.
While some families may choose to stay in the same school district, others might use renting as an opportunity to move to a better one, or get closer to work or cultural attractions.
"Living in a cultural centre becomes a reality when you get rid of the notion that living in a home is the American dream," he said.
The foreclosure crisis and accompanying real estate slump have created more rental homes. But there are also more reasons than ever for potential renters to be careful. Before renting a property, verify with the local tax collection agency that property taxes have been paid and see whether any paperwork related to the mortgage has been filed in civil court. Unpaid taxes or court filings could indicate the property owner is headed toward foreclosure.
-- Associated Press
Resale Homes
U.S. housing slump forces sellers to think landlord instead
WHEN Dave and Gina Schudi of Phoenix went house hunting last year, they knew the time was right to buy -- not sell -- a home.
So when they did purchase a new one, they rented out their old home.
"It all depends on the market," said Dave Schudi, who plans to sell the old house eventually. "We've got good renters in there."
Falling house prices and a slow market are forcing more homeowners to consider renting their properties.
It's something Tampa, Fla., realtor Julia Vakulenko suggests to potential clients.
"Basically, we ask all the people who contact us, 'Must you sell it right now?'" she said. "Most likely, it will just sit there or maybe sell below the market value."
Here are some tips for renting out your home:
- Familiarize yourself with local laws dealing with rental properties. Understand the eviction process, security deposits and what type of access you have to the property once rented.
- Determine whether you want to select the tenant and handle property issues or hire a company to do it. If you take on the responsibility, you are obliged to fix any problems (leaky faucets, broken furnace, etc.) or find professionals to do it.
- Develop a rental application. Ask questions on the application that will help you quickly determine whether you want this person for a tenant.
- Ask for references. Call former landlords and ask about the person's rental history. Verify that the references listed are really landlords and not the applicant's friends posing as landlords.
- Screen potential tenants. Once you've narrowed your field of potential tenants, hire a service to run a criminal and financial background check on the applicants.
- Consult with a lawyer or your provincial landlord-tenant boards before writing a lease. A well-written lease is crucial to protect your property. It will help you evict a tenant or hold them accountable for damage if necessary.
- Collect a security deposit equal to one month's rent.
- Perform a walk-through of the property with the tenant before he or she moves in. During the walk-through, make notes and take photos of any property damage. You and the tenant should sign the paper as an acknowledgement of the home's condition.
- Check on the property. Drive by at least once a month and look for signs of trouble such as garbage in the yard, extra cars in the driveway, or excessive wear and tear. Make arrangements to walk through the property three months into the lease to see how well the tenant is caring for it. (Make sure you give the proper notice required for entering the property.)
- Do not accept partial rent payments. Accepting money from tenants who are not paying the full rent can make it more difficult to evict them.
-- Associated Press
