Renting After Selling? Things to consider and realities for renting
When I talk to clients selling, renting is typically thought of as a viable option. “If nothing else, I can always rent,” I often hear many sellers say this, only to be sticker-shocked and frustrated when the available choices are underwhelming and cost more than what they wanted to spend.
Let’s take a look at the other challenges about renting a home in today’s market. Here are things you need to consider when choosing renting as a temporary solution for housing once you sell.
Renting costs are high
It’s going to be more expensive than you think. When home prices are high so are the price for rentals as well. The demand for housing extends for rentals as well. My advice is for go to Zillow.com and look at the current rental costs.
Find A Rental May Take Time
Finding a rental property may not be as easy as you think. Not everything you see online is really available. This is especially true with rental websites, where you’ll likely see something marked as available — when, in fact, it was rented out several weeks ago.
Then when you find something it may be too late to rent it. That’s because applications may have been submitted, and the owners might be in the process of evaluating them. Or maybe they’re waiting on a renter to submit a deposit.
Move-In or Turnkey Might Not Be An Option
Do not expect move-in ready. “It’s a rental.” Most rentals are not in the condition most of us want or expect. Many rentals are really in need of new flooring, paint, appliances and bathroom and kitchen remodeling or at least substantial updates. Most rentals will be rented “as-is” and you shouldn’t expect anything to be replaced or addressed prior to move-in.
Viewing Rentals Are Challenging
Even if you can find a rental getting in to see it might be problematic. If the rental is occupied, you may have to wait 24-48 hours to see it. The rental may not look its best when you do. The tenants might be packing, and condition of the rental might be not what you expect. You also need to ask the Landlord for what will be done to make it ready for the next renter. The time to get the place ready could be a problem if you need to move quickly.
The rental market is much like buying a home with multiple offers, be prepared for being one of many multiple rental applications for the prospective rental. Just like homes for sale, the rentals that are in the best locations, are the best condition, have a yard, a view and/or ample parking space will go super-fast.
Be ready and be prepared to fill out a complete application and supply all requested information down to the last detail. Incomplete applications or pieces of information that cannot be verified on your application may cause it to get passed over for one that is 100 percent complete.
In addition to a rental application, you’ll need to supply a copy of your driver’s license (or other official photo identification), agree to a credit and criminal background checks, and provide two to three months’ proof of income or bank statements.
If you are self-employed or working as independent contractor, you should have a statement prepared about how your income is derived.
There is typically an application fee per applicant as well as a fee for running a credit report and possibly a lease preparation fee.
Also, each landlord or property management company will have their requirements with respect to a security deposit, and some may want the first and last month’s rent.
Rentals That Allow Pets
No matter what kind of pet you have and have happily co-existed with over the years, what you think isn’t an issue might be a big deal to a landlord. Do not assume that every landlord will accept pets, and if they do, there are often restrictions on what they will agree to take.
Large dogs, cats and pets that fall outside the scope of normal household animals may simply not be allowed.
As renters, you are not in control of these decisions, and the landlord will often require a significant pet deposit for bringing in a furry friend.
In addition, many communities, particularly condominium and townhomes have restrictions on the size, kind and number of pets allowed. If a landlord will work with your pets, you most likely will have to pay a hefty — and often nonrefundable — pet deposit. They might also have to provide a photo of the pet along with an immunization record.
Pets are often a challenging part of finding a rental and usually a very expensive add on cost for renting a home.
What Appliances Are Included
Double check the appliances that are provided with the rental. Not all rentals come with a refrigerator, or a washer and dryer. If you are selling your home and have included those appliances with the sale, you might end up having to buy or rent those items — even though they may not potentially work in the next home you plan to buy.
Working With The Landlord
When you have an issue with the rental, who do you call? Most people don’t think twice about this when submitting an application for rent. However, it’s important to understand whether the property is managed by an owner or a property manager. You should ask and know who to contact when something on the property needs attention.
As potential renters you should ask before renting: Is the owner local or out of the area? What kind of response time can you expect from them or the property manager? Will you be authorized to take care of repairs directly up to a certain amount and ask for reimbursement or?
Understand The Lease
The lease is a contract — just like a real estate purchase agreement — to buy or to sell property. You should fully understand what the terms and conditions of the lease are especially in terms of notice and costs for terminating the lease before it expires.
If the intent to lease a home was to use this time to shop for a home or decide if the area is right for you, you should keep in mind that if you find something you want to buy or move, it might not be as simple as notifying their landlord that you want to move out.
Leases typically spell out the costs of breaking the term — you just don’t get out of them for free. They could also prevent you from being able to sublease to someone else unless you’ve negotiated it as a condition of the lease.
A landlord could enforce your ability to continue to pay on the lease until it runs out if they choose to, so proceed carefully. You also need to be aware that the lease you sign will tend to be more in favor of the landlord. It’ll have all sorts of rules, regulations and requirements tenants are expected to abide by.
Don’t anticipate or plan on being able to negotiate or amend the lease. In a competitive rental market, the landlord is often wanting a long-term lease to minimize the cost of having to prepare the property in between tenants or missing rental income. Make sure you understand the implication and possible additional costs for a short-term lease if they are available.
Understand the other costs in the lease like late fees or utilities that are included. There is typically a late fee is for not paying rent on time, and the landlord or property manager could report this to the credit bureaus. Also inquire whether sewer, water, gas, and electricity are included or not.
Need Help? Just Ask
While renting may seem like a viable option, and market dynamics may dictate that necessity, there will be a substantial amount of planning and logistics involved to secure a rental. It’s important for you to stay flexible in order to find what will be best for what your short-term housing goals are.
I’m more than happy to discuss and share with you the short-term rental market is in the area. I’m also willing to share with you a good property manager or management company you can work with. Much like an agent a good property manager who understands your needs can go a long way to making a short term housing need a reality.