Well, it is finally happening. The improving market means all those people who were forced into being landlords can now sell their house. I really felt bad for these sellers when the market was at it’s worst. They often had to move to take a job and left behind their home that wouldn’t sell. Renting was really their last option short of ruining their credit.
I have worked with many of these sellers this year. They have all been renting and want to sell. Most still have in the back of their head that they may have to rent again.
The first thing I always ask these sellers is if they really want to be a landlord. I tell them that it is almost always better to part with the house now or keep it forever. Renting for another few years can actually hurt them more in the long run. Things like a roof, furnace, air conditioner, water heater, wood windows, etc have a lifespan. The less of that lifespan you pass on to a future buyer the less your house is worth compared to the rest of your neighborhood. So, lets say you have a house that is 12-15 years old. You rent it another 3 years then decide to sell. By that time the roof and HVAC are old enough that it will be a stumbling block to buyers, so they offer less. Even worse, let’s say you have to replace one or both of those items? Your house isn’t going to be worth $5-10k more because that is how much you spent replacing those items! And if you aren’t too deep into a 30 year mortgage, you are not paying down enough in principal to offset the expense.
Nobody has told me they want to be a landlord. They all want out, especially the ones who no longer live here.
Once I have seen the house, I will make suggestions on what it will take to sell the place. I usually try to find that happy spot where we get the greatest return on every dollar the seller spends. Paint is the cheapest thing you can do when selling your house. Fresh paint always makes a house look it’s best. Carpet is a cheap item too. Think about it, when you walk in a room, the walls, ceiling and floors are most of what you see……they are ALL of what you see if the house will be vacant. A deep cleaning is a cheap way of making the house more appealing to buyers too. Often, changing out a few outdated features in the kitchen or bath go a long way. I also usually end up managing these type of projects since the sellers are not here to do it themselves. That is okay, because I enjoy watching a house go from looking like a worn out rental to something a buyer will be attracted too. And I have to say I totally enjoy seeing if my input turns out being fruitful for my sellers.
One thought on “Time for the accidental landlord to rejoice!!”
Happy Thanksgiving to you and yours, John, great article by the way, I always learn something new from them.