I have been blogging and posting about the emerging issue of owners and sellers who are considering renting vs. selling their property in order with weather the bumpy housing markets. On Sunday July 20, the New York Times ran a great article on this very topic, written by Vivian Marino (article link below), which I think is right on the mark in covering the issue.
In the article, Ms Marino talks about a "new class of real estate investors- accidental landlords", and walks through the stories of several actual owners who are (or have recently) dealt with the issue of not wanting or being able to sell their homes in the current market, and working through the issues of how to handle the property as a rental. Landlord-tenant, Fair Housing, caution about sourcing a lease to adequately protect the owner, managing vendors for repairs and maintenance, and the importance of screening tenants are important issues which the article raises.
Ms. Marino also talks about the value of professional Property Management, which I have discussed as well in earlier blogs. Essentially, managing a property effectively while navigating all of the above concerns can not only be challenging for an "accidental landlord", but can also be a full time job. For what is a pretty nominal fee (generally $100-$200 a month on average), a Property Manager is a trusted professional resource who can provide expertise and has the knowledge and experience to manage properties effectively. Ms Marino also wisely points out that Property Managers "vary tremendously", and owners should use references and referrals to find one they feel comfortable with. In addition to personal referrals from friends or colleagues, she also recommends NARPM (National Association of Residential Property Managers- www.narpm.org) as a referral resource. In addition to these, I personally find that a good way to tell how well a PM manages their properties is to drive by some of their properties. As you see signs or rental listings for a particular manager (and consider the impression their marketing makes on you as well), take a trip by the property. Is it well maintained, kept tidy (garbage cans off the street, etc), have they polished up all of the curb appeal elements? This is the best way to know how they will manage your property as well.
The only aspect that I felt the article under-represented was the "relax, it doesn't have to keep you awake at night" factor. Of course turning your home into a rental property is a big deal, and yes as I've pointed out there are a lot of complicated issues that bear on the situation. But with a little bit of education and awareness about them, you will be able to make informed decisions, and you should do so, then let it go, don't overthink or worry incessantly about it. If you are reading Property Management blogs and doing some cursory research, you understand the issues enough to know your resources.
"Landlords, if only by accident", NYT July 20, 2008 is highly recommended reading for all of the "Accidental Landlords" out there.
http://www.nytimes.com/2008/07/20/realestate/20sqft.html?_r=1&ref=todayspaper&oref=slogin
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