Poor Trulia advice: Their 5 things to consider before renting out your home…and my thoughts

Poor Trulia advice:  Their 5 things to consider before renting out your home…and my thoughts

 

 

 

 

 

 

 

 

 

 

Poor Trulia advice: Their 5 things to consider before renting out your home…and my thoughts

Today’s issue of LinkedIn Today contained an interesting column by Tara-Nicholle Nelson.  She’s Trulia‘s Consumer Ambassador of some sort, and she’s written the following Q/A on the topic of 5 factors to weigh before renting out your home:

http://www.rethinkrealestate.com/http:/www.rethinkrealestate.com/5-factors-to-weigh-before-renting-out-your-home/#

I respectfully disagree with her in some areas, so I’ll offer my thoughts here and go according to her points…

1.  What’s the state of your state?  First thought is “What the heck is she talking about?”  Getting past that, her advice still doesn’t make a great deal of sense- but I’ll just go with commenting about how one can’t “tenant-proof” any property as she mentions.

2. Research your local rental marketI agree with a good bit of her response here- especially in stressing the importance of owners having realistic rent price expectations.  There’s perhaps nothing worse than an owner who refuses to trust actual, hard and fast data with regard to properties similar to their’s that have recently rented.   It does neither a property owner nor property manager any good to list a property at a price that’s above market.

3. Tenant-proof the place.  This is simply a mission impossible, as mentioned in #1 above.  Tara-Nicholle mentions her father’s experience and how he looked to make an investment property of his “less prone to being completely annihilated by tenants”.  His solution?  Use lower-grade appliances, among other things.  I disagree with this one a great deal.  The best way to “tenant-proof” a property and to do your best toward ensuring appliances and other features won’t be “annihilated”?  Do your job in terms of screening applicants (see #4, up next).

4. Pick your tenant carefully.  That’s about as much of this “factor” that I support- it’s title.  Following that,  Tara-Ncholle offers that “it’s tough to know from someone’s credit report how they will actually live in your home”.  False, false, false.  One can never know exactly how a tenant will (or won’t) take care of a property, but my handling of 3,000 or so tenant applications has proven out that folks with stellar credit take great care of the places they call home– and some folks with fair credit do the same.  That said, efforts towards “picking tenants” should be geared toward verification of past rental histories, employment and credit/criminal histories.  The sum of all of these parts is what serves one well in the tenant selection process.

The author also looks favorably upon one renting their property to friends or “friends of friends”, asserting that there’s “something about the unwritten social contract involved in renting to a friend or a friend of a friend that boosts your chances of a successful landlording experience“.  No, no, no, no and “Heck, no!”  Friends are friends, renting out one’s home is a business– whether that be an owner renting out their own or their hiring a professional property manager.  I’ve taken over management of a countless number of properties from well-intentioned and kind-hearted folks that have made the worst private landlords. 

Across the board, friends or “friends of friends” are more likely to pay rent late- personal relationships notwithstanding.  Kind-hearted landlords/buddies/friends are more likely to “understand” bogus excuses than professional landlords, and suffer their consequences.  Friends or “friends of friends” are also more likely to place bogus maintenance calls and be more demanding that those issues be quickly addressed.  Lastly, friends or “friends of friends” are much less likely to abide by any of their lease’s restrictive-type provisions- if a lease exists at all.  The ramifications of that can be wide-ranging and far-reaching, but friendships or “friend of friendships” existing on the front end of these deals may surely be gone long before any agreements have run their course.  Bottom line:  good friends or “friends of friends” that wish to remain so don’t rent their places to friends or “friends of friends”.

5. Consider “rent to own.”  Oh, my goodness…Can you hear the “Heck, no!” on this one from where you’re sitting?  We’re talking rental properties here- not the $100 VCR that’s ultimately $350 after one pays on the dang thing for a couple of years!  Confusion often reigns here, with many tenant propsects asking for “rent-to-own” or “lease-purchase” and not knowing what they’re talking about.  Some think that every dime they pay in rent goes toward an eventual purchase, some look to pay an amount above market rent and have the excess go towards a purchase, and some variations simply lock an owner into selling their place to the tenants at an agreed-upon price whenever and if ever the tenants choose to exercise their option. 

I’ll agree with the author’s assertion that folks truly and earnestly geared toward an eventual purchase of the place they’re renting may take better care of the property in already looking at it as “their’s”, but in most cases, the only folks benefitting from an option are the ones given the option.  For the homeowner/landlord, the option is mostly a loser.

All told, I hope whoever sought advice from the author also sought it elsewhere.

Poor Trulia advice:  Their 5 things to consider before renting out your home…and my thoughts

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About Dennis Burgess

Dennis B. Burgess Realtor in Orlando, FL ORRA Vice-chairman of Strategic Planning/Secretary ORRA/FR Boards of Directors Empire Network Realty 6000 S. Rio Grande Ave., #104 Orlando, FL 32803 Cell: 205-445-4755 Office: 407-440-3798 bamaburgess@hotmail.com Twitter: @orlrentals Turning vacant into occupied, and "houses" into "homes"
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