The downturn in the real estate market and the current state of the mortgage industry's much higher credit requirements has created a boom in the residential rental business. Home owners unable to sell their homes have welcomed the influx of renters looking for temporary housing. Renters are coming form many sources. Many need to relocate but cannot sell their existing home, this is especially true of many of our military personnel. Younger individuals have witnessed the calamity of the housing crash and are unwilling to take the risk of losing 10 or 20% of a homes value, they have no confidence in the "appreciation" of real estate which their parents took for granted. Perhaps the largest number of renters has been created by the much elevated credit requirements imposed by the mortgage industry, they simply cannot qualify or cannot make the required down payment.
Regardless of the source, homeowners and tenants have found each other and a rental boom has ensued. The growth has not been from the traditional apartment complexes but from individuals dealing with an unsold home and looking to move on. Given the choice of continuing to offer a home for sale in a very challenging market versus renting quickly and collecting a $1,400 monthly check, the choice is obvious. Rental rates have increased to historic highs. Current rental rates are often double what a corresponding mortgage would be. Homeowners, although not voluntarily, have become owners of income producing properties and many have found the experience quite enjoyable.
I have sat with many of my clients with homes for sale and discussed the options. While the market has improved, selling now will certainly "lock in" the real estate loss suffered during the housing crisis. To find the next motivated buyer often means reducing the price even further and appreciating that few full price offers can be expected. While the homeowner waits, he continues to pay the mortgage, taxes, utilities, HOA dues, insurance and maintenance expenses. This can easily be hundreds of dollars a month waiting for the buyer to show up and make a "low ball" offer.
The rental option is truly a welcomed suggestion. Rent your home at historic rates (Moore County Ave. Rent is $1,400 for 2011), have a tenant pay the utilities, maintain the yard and in general look after the well being of the home. If one includes the tax benefits of a rental property, the choice is very clear. The additional benefit of allowing time to pass in the hopes of an improved real estate market only adds to the equation in favor of renting.
How do you rent your home? Much like selling your home you can either do it yourself or hire a professional. How does the homeowner find a tenant, check their background and credit, negotiate a lease, deal with routine maintenance issues, collect rents, evict deadbeat tenants, deal with security deposits while staying within the Federal & State laws relating to housing. I suggest this is a job for a professional and likely a staff of professionals all with different skills.
Coldwell Banker Advantage/ Sandhills Rentals offers a full service property management service to our clients. With a staff of three full time licensed agents and support staff to assist in marketing, accounting and daily "issues" makes the process routine. Over the past 12 months Coldwell Banker/Sandhills Rentals has gained a 38% market share of all Moore County MLS reported rentals.
Does your choice of property manager matter? Tenants care, they want to know that their needs will be met; professionally and promptly. Homeowners care because they are relying on the property manager to make prudent decisions regarding necessary repairs, accurately make payments and look after the home owner's interest. Sandhills Rentals does all this and finds tenants faster than the MLS average by a full week.
When you are considering renting your home, give me a call. I am happy to deliver the excellence of the Coldwell Banker/Sandhills Rentals team to your rental needs.
Bob Barmore
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