"If I can't get the price I want for my condo...... I'll just rent it."
We can't tell you how often we have heard this statement over the past few years. With the housing market in Boston in a bit of a holding pattern, many condominium owners feel that the best thing to do right now is rent and wait it out.
There are many advantages to this strategy: the potential of market increase, tax deductions, and many other positive aspects to becoming a landlord. But, experience tells us, it may not be as simple as you think.
As Realtors, it is our job to inform condominium owners of all aspects of all their options. With that in mind, we ask people to consider these Seven Considerations Before You Rent Your Home:
1. Tenant occupied properties tend to sell for less
If you decide to rent your property with the intention of selling next spring or the year after, you need to consider that marketing a property with tenants in place can put you at a disadvantage. Tenanted properties tend to not show as well and create challenges for showing availability.
2. Renting your unit could pose a disadvantage to your condo association
One of the largest obstacles we face in the current mortgage market is owner occupancy. A building with more than 30% of the units rented could lower the value of all condominiums in the association.
3. Damage to the property
Keep in mind that if you have recently renovated or improved your property, having a tenant may place wear and tear on these "new" items. Additionally, despite proper screening and best intentions, a tenant almost never takes as good of care of a home as the owner does.
4. What if you get the Tenant From Hell
Even with a complete, professional screening, there is always a chance your tenant could "go bad". A landlord needs to think through if they can afford the monthly expense if the tenant does not pay rent, especially in a down economy without the readiness of available new jobs, should your tenant lose theirs. Are the financial advantages worth the potential cost of renovating after a tenant destroys your property or the cost of an eviction?
5. Monthly Nut
The most important first step in deciding to rent your property is to determine the cost of ownership verses the potential rent. Even if the rent can cover your mortgage, taxes and condo fees, you need to consider maintenance, vacancies, building assessments and other potential expenses of ownership.
6. What if the market goes down instead of up?
As Realtors, we are currently very optimistic about the future of our current real estate market. However, we do not have a crystal ball and there is always the chance that over the next year, two years or beyond, the market in Boston will decrease rather than grow. If you rent with the intention of selling for more "next year", you could end up being a landlord much longer than you planned for.
7. Tenant Issues and Maintenance Problems
Unlike a stock certificate that sits quietly, tenants need things! Are you prepared to get a locksmith at 2am? Do you know good plumbers, electricians? Are you ready to liaise with your condo association if the tenant violates the Rules and Regulations of your association? These are questions any potential landlord needs to ask themselves.
As Real Estate Professionals with a combined 30 years of experience in The Boston Market, we are here to answer your questions, help you weigh your options, and always give you honest advice. Please feel free to contact us anytime for a free real estate consultation or to answer your questions. The knowledge is free! We are here to help and serve.
By, Betsy Herald