Many Sellers are becoming unwilling Landlords, renting their homes because the home would not sell for what they owe or what they are convinced they need to get. Many of these unwilling Landlords are turning to Agents for help in leasing their home. I have been a willing Landlord for over 13 years and have learned a few things about being a Landlord. To best help our clients lease their home, here are some steps that you need to pay close attention to:
- Check with the municipality where the home is located for any additional inspections and licenses that will be required to lease the property.
- If there is a mortgage on the property, have the owner check to see if your mortgage note will allow for the property to be rented. Many mortgage notes prohibit renting the property. If the mortgage company becomes aware of the home being converted to a rental, they could call the note due and demand immediate payment.
- Locate a strong Landlord Lease. Not all leases are created equally. Also, you will need to have the Federal Lead Based Paint Disclosure form and pamphlet on hand.
- Research your state's Deposit Law. You will need to know what your state allows for deposits. In Michigan, where I am located, our law only allows a maximum of 1½ months of the rent to be held as security deposit.
- Screen, screen, screen prospective tenants. Don't assume that just because they are working with an Agent that they are qualified to rent the property. Selecting the right tenant will determine your Landlords stress level over the coming months. Use a good Tenant Application that gives the ability to run a credit report of the prospective tenant. I recommend that you check the credit report of each prospective tenant and check past landlord references. Rush or skip this step and your Landlord will become very familiar with the eviction process.
- Prepare your client to be a Landlord. Prepare her for calls that the: hot water tank is leaking... on Christmas Eve, furnace quit on your daughter's birthday, or rent will be late this month.
- If your client is still resolved to lease your property, but do not feel they have the time or skill sets needed to be a landlord, refer him to a Property Manager who can reduce the management stress that accompanies being a landlord.
Many Agents do not want to wade into leasing either because leasing is viewed by some as a trivial real estate transaction, or because the commissions are much less than sales. While I do not know of any agent that are living off from their leasing commisions, I have been able to convert several of my leases into sales. By staying with the transaction, you keep yourself in proximity to the sale. By having the skill and expertise in helping clients with their leasing needs, you will become their trusted adviser for all their real estate needs.
Scott A. Petersen
Remerica Country Place
(734) 776-8355 cell
(734) 981-2900 office
(734) 736-1114 fax
44205 Ford Rd.
Canton, MI 48187
www.scott-petersen.com
spete05@gmail.com
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