Why Don't I recommend Sellers/Homeowners Rent their Property?
There will always be special circumstances or exceptions and if a Seller absolutely has to rent to offset the expense of the mortgage then they may do so. Usually my advice if a Seller insists on renting their residence is to recommend a Property Management Company who will execute a Lease and deposits with the potential renter.
There are several reasons why I frown upon a Seller or homeowner Renting their home on their own.
- Wear and tear on the house
- Damage to the house
- Repairs that will need to be made
- Pet Deposits
- Decrease in value of the property if it is torn up
- No Recourse or Proper Lease executed with Deposits
Even the best friend or college buddy you know can still mess up your house!
The scenerio below is exactly why I don't recommend Sellers Rent their home residences.
I was recently contacted by a homeowner who purchased a home in Lake Charles two years ago. When the homeowner was transferred with his job, he decided to rent his house for an amount that would still pay his mortgage. Now the homeowner resides in New York which is far away from Lake Charles LA. The renter has long moved out and the homeowner contacted me to sell his Lake Charles home. The homeowner has not seen the current condition of his home in over a year.
I obtained the keys to the property and went to check the house out preparing to list the Lake Charles house for sale. My discovery was a dirty house that had not been well maintained or cleaned and left in disarray. The renter had attempted to paint over the wallpaper in the kitchen and the painting was not even completed.
The appearance of the house in its existing condition is typical of what we usually see in foreclosed homes.
I had to share the photos of my discovery with the homeowner miles away in New York and break the news to him what condition his home was now in. He was sad to see the house he loved compromised. However, he knows he has to clean and paint it to get it in better condition to sell for top dollar. Hard and costly lesson for a homeowner to learn regarding renting just because of the wear and tear on the home. It also delays the "prime time" for me to lit this home for him when the market is great!
This is exactly the outcome of what can happen and why I don't recommend that a homeowner or seller "rent" their current home. You must evaluate the risk of doing so.