Can't Sell Your Home? Things to Know before becoming a Landlord....

Due to slower sales & lower prices in many areas, a lot of homeowners are becoming landlords. After all, most people can't afford to keep paying for two homes indefinitely and if it's not selling, you have to find a way to pay those bills.

Leasing out your home can be a great interim option if your home is not selling. Hopefully at or near the end of the lease term, you can put it back on the market and you'll have better luck the next time around. Or, you may decide that you like the income you receive from leasing out your property and decide to keep it that way.

There are a few things to know when leasing a property:

• The leasing market is very competitive right now. You are not the only one in this boat, so price your home appropriately or you won't get it leased in a timely manner.
  
• Hire a Real Estate Agent to lease the property for you - they can take care of the marketing and the details, but be prepared to pay up to one month's rent (on a 12 month lease) in leasing fees. Plus, they can screen the tenants for you.
  
• Hire a Property Management Company to lease the property for you and then manage it. Again, you will pay leasing fees, plus a % of the monthly rent for them to manage it for you, usually anywhere between 7%-15% per month, in our Austin & Highland Lakes areas. Plus, they will charge you when they have to make repairs etc. If you are no longer living locally, this can sometimes be your best option. After all, it's rather difficult to arrange to have repairs done or to check thinks out yourself from 1000 miles away....

If you live in a condo or townhome complex, and even in some single family neighborhoods, you may need to check to be sure that leasing is permitted. Some areas may allow long-term leases (over 6 months), but not short-term leases. If you live in a resort area, short-term leasing may be desirable for you, but generally having a property management company will be essential in that scenario.

If you think that you will want to sell the property, you can add a clause into the lease that the tenants need to allow a lockbox to be put on the property and that the property be shown with reasonable notice during that last, say, 30 or 60 days of their lease term.

If you decide to manage the home yourself while it is leased, there are a few more things to remember:

• Learn the landlord tenant rules for your area. For instance, did you know that you are required to change the locks for each new tenant? There are a lot of things to learn about both your rights and your tenants.
  
• Be sure you know and understand your lease terms.
  
• Don't let issues drag on. Resolve any tenant issues quickly whether repair or $ related. Good communication is key to a good landlord/tenant relationship.

Leasing your home can be a good short-term option if your home is not selling. You may have some repairs/repainting to do when the tenants move out, however, before re-marketing your home for sale. Tenants don't always keep a home as well maintained as you would personally and you will probably have to spend a little money to bring it back into "showing" shape.

Good luck!

Sue Ellett, Broker-Associate
Paragon Property Group
Coldwell Banker United Realtors
512-422-7182 suemellett@yahoo.com
Austin/Lake Travis ~ Marble Falls/Horseshoe Bay/Lake LBJ