Things for prospective landlords to consider before renting
Last updated 10/1/2009 at Noon
While the economic downturn hit many people rather hard over the last year, some people have been able to weather the storm and actually thrive in the current economic climate.
Real estate investors who managed to keep their holdings under control, for instance, have experienced somewhat of a financial windfall as the economy regressed.
This may be due to victims of foreclosure seeking rental properties or more and more people steering clear of committing to a home of their own and choosing instead to rent.
But renting out a property isn’t as easy as 1-2-3, even in a market where more people are looking to rent than buy. In fact, vacancies in larger cities such as New York and Los Angeles are so commonplace that rents and stipulations such as realtor fees have begun to drop, albeit slightly.
Still, the current climate could benefit those with a spare property ready to rent. There are just a few things to consider before advertising.
Is it allowed?
It’s not uncommon for young people to purchase an apartment before purchasing a home but keep the apartment once they do, in fact, buy their first home. That’s often done with the intention of renting out the property once a home is purchased.
While that’s a sound financial plan, it’s not necessarily allowed. Before deciding to rent out a property, be it a condominium or apartment, be sure the condo association allows it.
Discuss the situation with an association representative to see just what is and isn’t allowed. In some instances, a contract will stipulate that a property can be rented, but only through the association’s own management team, which can cost the owner money.
Will you do it yourself?
While some condo associations insist their management team handle things, others don’t. Still, that doesn’t mean doing it oneself is easy or even desirable.
Owners can hire a real estate management group independently that will handle things related to renting, such as finding tenants, running credit checks, even maintenance and handling complaints.
Of course, this will cost owners money. But for those who simply have busy schedules and an extra property they’re not yet ready to sell, hiring a management group can save you the headaches of being a landlord while still affording you to earn extra money on the property.
Furnished or unfurnished?
Another thing to consider is whether or not to rent the property furnished or unfurnished.
Chances are, if the homeowners have been living in the property recently, there’s plenty of furniture available to rent it furnished. Of course, this means they’ll have to purchase furniture for their new place.
Oftentimes, the financial benefits of furnished versus unfurnished is a toss-up. Some renters prefer an unfurnished place, while others would pay more per month if the place is furnished.
One option is to lease the apartment as “Furnished or Unfurnished.” This keeps the apartment on all potential renters’ radar, and if the owners settle on a tenant who prefers it unfurnished, they can always rent a storage unit for a small monthly fee to store any leftover furniture they might want to keep.