<p>My husband and son purchased a home for my son to live in during medical school in May 2008 knowing we will sell the home after graduation. Fast forward to 2012 with graduation in 3 months and houses not selling or selling below value. As my son will not be staying in the small city he is attending medical school, and we don’t have the money to bring to the closing table, we think trying to rent for a year at the minimum might be our best option to stay afloat. Selling by owner is also on the table, although I think we will have better luck renting.</p>
<p>We actually sold our last home by owner 18 years ago, but we were living in the home at the time. My son will be moving somewhere by mid May, so if the house is not sold or rented by that time, we might have a problem getting it shown. We could give it to a real estate company at that time for a rental property to show and manage, but I am afraid there again we will not be able to even cover our mortgage with the rent. We live 3 hours away from the home, so I could go down one day a week to show it if necessary after my son moves.</p>
<p>Other than Craigslist, any suggestions where else to list the home? We are going to have flyers made that will be distributed to each department at the medical school as many of the incoming residents will be interested in homes for rent and sale. The school also has an off campus housing office where we can list the home. I feel like renting is going to be easy as far as finding tenants as the house is nice and all my son’s friends felt like it was a great house. Selling will be tougher, but it only takes one buyer!</p>
<p>I know there are these flat fee ways to list in the MLS, but a quick looks brings up several different companies and prices. Might anyone have any experience with any of these companies?</p>
<p>What do I need to know about renting out this house? I have been on the other side as a renter and helped my kids when they rented, but have never been the owner of a rental. Any suggestions are most welcome.</p>
<p>Depends a lot on YOU & how much effort YOU want to put forth. We were landlords of a home for a while. We were “softies” and rented significantly BELOW market value, but it was OK. When the tenant left, we turned it over to a property manager who made needed minor repairs and has kept it rented ever since.</p>
<p>If it’s an older home and may need some maintenance that you don’t want to be involved in, it may be worthwhile looking around and asking around to see who does property management and has satisfied clients in the area. Property management companies in our area generally charge a flat 10% fee, plus any ad fees for running ads to attract tenants, plus whatever repairs cost. </p>
<p>If you’re comfortable with Craigslist, that is a way many tenants and landlords offer and find good matches–S has as well as a friend I know who rents rooms out to students (she lives in the top 1/2 of the huge home & rents rooms on the bottom floor).</p>
<p>Are there any medical staff or profs or MDs who would like to rent the house while they’re in the area?</p>
<p>I hire somebody to manage my properties for 6%, plus 1/2 of the first month. I avoid all the headache and stress. Especially when you don’t live nearby, it’s worth it.</p>
<p>We are listing at the medical center by way of flyers, as well as though the off campus housing; I believe this will be our best bet. We are also listing on the new classes Facebook pages when we can as the students are always posting for roommates. My problem with Facebook is I don’t want my personal FB pages linked to these group pages. One of the students was kind enough to list it for me from her page for one of the upcoming classes and I had two other students contact me.</p>
<p>We have considered a property manager, and might go that route if we can not rent or sell it before my son leaves in May. Ten percent seems to be the going rate with some other cost added in up front. I have accumulated several repair people in the area that I could call if a renter needed maintenance; the problem would be the renter being home to let them in, whereas a property manager could be there to take care of that.</p>
<p>I would so much rather sell the house as we need to be done with it due to our current finances, but don’t want to sell it at a huge lose. My son just informed me that there are two other homes on the street for rent, so he is going to get the information on those. We need to be in the same ballpark on rent and not try to squeeze every dollar we can get out of a renter. I know one of the houses is smaller, but has a nice layout, don’t know anything about the other house.</p>
<p>I also need to decide if we rent whether I should leave my son’s washer and dryer. I guess we will wait and see where he ends up and if he needs them or not. It is possible that he rents a place that has w/d in the unit, or that he doesn’t have room for a full size w/d.</p>
<p>FSBO (as For Sale By Owners) is good when it is seller’s market. However, it is buyer’s market now and if you do it long distance, it will add more tension and trouble to the owner. Unless you are priced at give it away level, it is very difficult to get a serious buyer by the way of FSBO. Those buyers go to a realtor to get a bargan and MLS is a more widely advertising media. FSBO in a buyer’s market is going to get a lot of lookers and bottom fishers. And Realtors call FSBO all the time to get listings, so why bother? </p>
<p>Moreover, when your S leaves, who is going to show thee property? either sell or rent.</p>
<p>Its better to get a property manager for rent and get a Realtor for sale. Do not penny pinching for the commission.</p>
<p>It turns out we are able to continue to list the rental by owner and still have it on the market for sale with a realtor. I was surprised I would be able to do that and get out of my listing agreement if I found a good renter.</p>
<p>Unfortunately, we have the rental price lower than our mortgage, but we didn’t think we would be able to get more from students. Because we only put 3% down on the house 4 years ago, you can imagine there is no equity in it! The list price might be a bit too high, but we decided to give it a try and see what happens. </p>
<p>We haven’t decided if we will use a property manager or not if we rent; I am looking into that now. Looks like the going rate in this area is 10%. I do have several repair people I could call in the area that I have used or a friend in the area has used. I am thinking about trying to do this without a manager and see how it goes; if it gets to be too much, I will then hire someone to manage the house for us. This is all assuming the house doesn’t sell, which would be my first choice!!</p>
<p>Realtors do more than assist buyers and sellers. They also assist landlords and tenants find each other(for a fee). Many realtors own rental homes and can advise you.</p>
<p>Be careful: Most residential home mortgages are based on a home being owner occupied(part of the “small print”). Commercial mortgages are mostly aimed for landlords. Residential mortgage holders are often unaware of that clause. That means most residential contracts contain a clause that if the bank finds out it is no longer being used as owner-occupied, but is now a rental contrary to the mortgage terms, the bank can legally require the entire balance of the loan immediately. Some don’t realize this because it rarely comes into play. The idea is that(theoretically) a landlord could trick a bank into a lower down payment and cheaper interest if he fooled the bank into thinking it would be his personal residence. Then, once he has the home, he leases it out and has higher profit due to lower bank costs. Rental home mortgages typically require 25 to 33% down, and have a higher interest rate too. This clause is a bank’s safeguard against such a fraud. Even snowball gives us no reason to believe she and the hub intended to keep this house for the family until it was paid off. Sounds to me like the intent was to sell it, but now due to economics they might prefer to lease it. Banks usually have the legal right to call up a loan if a residence become a commercial residence.
In practice, banks rarely utilize this clause, and as long as they are getting the mortgage payment as promised, they don’t care. BUT- it is important to know the risk because typically they do have that option.</p>
<p>My personal experience as a landlord is that if this home is in another town, hire a prop manager, and if you lose a small bit of money on the deal, then consider it part of the cost of the kid’s education.</p>
<p>Do you have a CPA? If so, talk to him about the tax implications of selling the house at a loss after having renting the house. It might be to your benefit to rent for a couple years and then sell the house. How much less is it worth than what you paid for it? Even if you came pretty close to breaking even, your son saved how much in rent over those years?</p>
<p>Also, why not look into doing a short sale? If you don’t plan on buying a new home for then next 3-5 years it might be a good option to consider. It’s not the best option but it is something to look into. </p>
<p>Have the new medical students for the coming year found out where they will be going to med school yet? If not, I wouldn’t do anything until after that date.</p>
<p>When I owned a rental property (for 13 years) the only method I used to rent was placing a for rent sign out front. I was always amazed at the number of people who called. I never had trouble renting it, and usually could chose who I thought would be the best renter from a pool of interested people. But if you put a sign up, be ready to be very busy. I usually had it rented in two weeks, but it was a hectic two weeks.</p>
<p>Putting out a rental sign wouldn’t really help as this neighborhood is hidden. I have talked to several natives of the city, mind you this is a small city, and they had no idea this street was there! I think with off campus housing, the new classes FB pages, Craigslist, as well as the individual departments at the medical school that we should be good.</p>
<p>SteveMA- Match Day is this Friday at noon, although some new Residences and Fellows already know where they will be. This house is a bit excited for the day :)</p>
<p>Our CPA wants us to rent because he knows we don’t have the cash to bring to the closing table. I don’t know what the house is truly worth right now. If we can get out and not hurt ourselves with selling, we will do so. Not interested in a short sale; we can rent and not hurt anyone’s credit that way.</p>