"Accidental Landlord" - an accident waiting to happen?

It has become more commonplace for a private homeowner to unexpectedly find himself (gender neutral for this writer's purpose) playing the role of landlord as a result of the difficult selling environment in real estate. This happens because the property owner needs to move on to a new job, or some such compelling reason. When the home sits empty, unable to find a buyer, the "Plan B" is dusted off and presented to the owner: RENT IT! Get some revenue stream started with the property!

And so this home that perhaps was on the market for SALE, now becomes a home on the market for RENT. There are two sides to a lease arrangement: the landlord's side, and the tenant's side. Each has its own set of challenges, thrills, and every other emotion in between. Most Realtors will tell you that they are handling many more home rental listings over the past 3-5 years than they ever imagined they would. I include myself in that statement. I have represented both landlords and tenants.

I want to keep my posts brief, so this one will put forward one caveat for would-be tenants who are searching for an appropriate rental property. Do whatever you can to feel confident that your landlord is not having mortgage difficulties on the property that you intend to lease. Or at least be prepared to move with perhaps only 30 days notice once you do move into the property. Unwittingly, tenants can sign a year lease, move in, and unceremoniously be forced to vacate in the first month because the owner is in pre-foreclosure and the bank has earned the right to take the property back. This is exactly what happened to tenants in a downtown Evanston condo last year, folks who were referred to me to rescue them and find an immediate replacement rental in a matter of days. Yes, I helped them find a wonderful new rental home. The agent who rented the condo to them had some unpleasant consequences, I was told. My office sales manager has repeatedly warned us agents to be diligent when working with rental clients (or landlords); "Check the status of that property!" We Realtors are charged with taking every precaution to protect our clients' interests, and that includes not getting kicked out of a rental property before the term of the lease ends.

When looking for a rental home, you must do your homework on the owner of property, regarding the mortgage status. There are websites online that promise to report on a landlord's mortgage status, for a subscription fee. On the other hand, you can determine that information for yourself, free of charge, if you are looking in a community that has public website access to county records, such as the Recorder of Deeds and the local Circuit Court. Foreclosure is a legal process, and foreclosure lawsuits can be tracked online here in Cook County.  Or, you can put that task in the hands of your favorite Realtor, who will take care to show you only properties that are not tainted by the threat of foreclosure.

This is just one more outcome of the whole housing/mortgage crisis in America, but at least you can manage it by taking precautions to protect yourself.

It's All About Trust in This Business of Real Estate

It all started so simply. I had sent out a "just listed" postcard on a rental property last summer. One of those cards went to a neighboring home close to the new listing. The resident of that home passed along the postcard to a coworker who was searching for a rental. That seeker called me to see the property, I showed it to her and her spouse. It was not a fit for them, but I offered to help them find a place they could call their next home. We worked hard together, and they landed in a condo rental that thrilled them. That one modest rental client has now recommended me to three coworkers in only a handful of months' time; two are rental seekers, and the third will be a condo for-sale listing. Each of this second wave of clients has recounted the enthusiasm that the first client couple has for my service to them. The newly referred clients are anticipating that their experience with me will be a repeat of that enthusiastic result. They are trusting me to deliver. That first client couple are trusting me to provide the same level of service to their friends. Kind of humbling.

Real estate is not simply buying or selling properties

I had a fun afternoon today, helping a client search for just the "right" condo or apartment to rent for awhile. The search is focused in Chicago's Loop area, which means investigating numerous hi-rise buildings with varying amenities.

Yes, licensed real estate agents can help a client with a rental property, either to list the property in the multiple listing service, or to work on behalf of a would-be tenant. As a listing agent, the compensation for handling the rental process is typically the equivalent of one month's rent. As the tenant's agent, compensation is paid out by the listing broker. The client pays nothing for a Realtor's assistance in finding the right rental home.

We are in Chicagoland, which means there is a huge offering of rentals on the internet, particularly CraigsList.com. Often we find that Craigs List provides larger numbers of rentals than does the MLS. I always advise a client to search Craigs List, in addition to having me arrange suitable rental property appointments.

Choosing the best rental property for a client might involve coaching that client to go down a mental checklist of features and benefits that sometimes parallels a home purchase, sometimes not. In the case of hi-rise buildings in Chicago's Loop, considerations are these: 1) location - does this address give you easy access to your daily activities; 2) car parking - do you have a car, and if so where will you park it, and what price will you expect to pay to park this car; 3) monthly rental fee - can you afford it!!?; 4) VIEW VIEW VIEW - Chicago means Lake Michigan for preferred views from a unit's windows (no lake view? thumbs down!); 5) condition of the unit - are the kitchen and bathroom updated? Walls painted? Carpet clean?

My client found a perfect place to rent today, and was confident the moment we walked in the front door of the unit. This confidence came from having viewed many other units over the past several days, giving a basis for comparison. When this perfect place was revealed to us today, we knew it was "the one." Everything was right: location, price, views (this is a corner unit with lots of sunlight and attractive things to watch out the windows, not just the rooftops of neighboring buildings), good general condition, etc. We pounced on it immediately, got an application form and lease from the listing agent, and expect to tie down the lease tomorrow.

Client happy. Realtor happy. Job done.