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Turning Sellers into Landlords--What Homeowners Need to Know About Managing Their Property

As a homeowner without property management experience, are you ready to take on the demands of what is required to be a landlord?

As we continue to navigate through this uncertain real estate market we see a new trend taking hold--sellers are now taking on the role of landlords.  Owners who have been unsuccessful in selling their property and need to move for personal reasons, or employment opportunities are now trying to rent out their homes.  With the plethora of short sales and foreclosures out there, rental properties are drawing people from all walks of life and financial status.  As a homeowner without property management experience, are you ready to take on the demands of what is required?  Do you know what is required in your state, city or town?
 
Most homeowners are not equipped to comfortably switch roles from homeowner to landlord.  Most homeowners believe that if they hire a real estate agent to list their property in the MLS and a renter is found then all is well and the story closes.  It's just not that easy.  In fact let's take a look at the responsibilities of both the homeowner involved in the rental.

Homeowners' Responsibility
 
Make sure your mortgage is paid-to-date.  This is very important.  If you are renting the property because you can no longer afford the mortgage payments then make sure that the rent you are charging will cover the mortgage payment.  Of course you will also have to keep the rental price in alignment with the current rental prices in your area.  It is always wise to seek the help of a real estate professional.  They will pull up statistics much like they would for a market analysis.  Or if you would like to go it alone without the help of a professional then check out the rental properties online.  Keep in mind that rental prices vary in different locations.
 
Make sure your homeowner association dues are paid up-to-date.  This is extremely important.  You can be current on your mortgage payments but if you have been neglect in making payments to your homeowner association your property still stands the risk of being foreclosed on.
 
How will you market your home?  Pictures?  Flyers?  Ads?  Online advertising is key.  Your rental property needs to have online exposure.  Gone are the days when you could capture your target audience in a local newspaper ad.  Most people are searching for properties on the Internet from the comfort of their homes.  Remember to upload pictures of the rental online.
 
Make sure you understand what Laws and Regulations are in place for landlords in your state.  (Click here for more information within the state of Illinois for the PDF format of the "Practical Guide for Landlords in Illinois.") There you will find current information on lead-based paint, eviction laws, tenant violation of lease agreement, carbon monoxide and smoke detectors laws, and The Illinois Human Rights Act/Fair Housing Act just to name a few.

In addition, landlords need to be familiar with the municipal licensing and inspection programs in your area.  They differ by village, towns and cities but all are governed by Illinois State Law.  Please note that as of January 1, 2012, it is unlawful for landlords, property managers or licensed agents to charge consumers more that their costs to pull credit reports or background checks.
 
In my professional opinion if you are thinking about renting out your property and you are too busy with your career, job and family responsibilities or you are moving out of state and not able to handle the property management side of homeownership, then you should seek the aid of a real estate professional to manage the property for you. Bear in mind that not all REALTORS® are property managers.  This is specialty area and you would be wise to seek out the help of someone who specializes in property management.

This post is contributed by a community member. The views expressed in this blog are those of the author and do not necessarily reflect those of Patch Media Corporation. Everyone is welcome to submit a post to Patch. If you'd like to post a blog, go here to get started.

Tawanda The Avenger April 18, 2012 at 09:00 PM
Good information for the would be landlord however, homeowners need to make sure that their mortgage documents allow for the property to be rented. Some lenders can call the loan due or raise the interest rate if the property becomes a rental. It is a good idea to look into this. Also, look into the homeowners insurance and make sure you are covered if you rent out your home. Would be tenants also need some protection against homeowners under water and facing foreclosure. Tenants need to make sure the owners are paying their mortgage and homeowners association with the rent they are collecting, otherwise the tenants may arrive home one day to find their possessions on the front lawn and the door padlocked, with little or no recourse. I suggest that would be tenants proceed with caution and google the address of the property.l. Also, check on-line with the Will County Recorders Office for legal filings against the property or owner, including foreclosure action. http://www.willcountyrecorder.com/ The site is user friendly and a would be tenant can access information by property address or name. Desperate people can do desperate things and both owners of homes and would be tenants both need to proceed with caution.
Linda Kemp April 19, 2012 at 07:14 PM
Thank you both for your great comments. The message here to proceed with caution. Renting out your home isn't as simple as placing an ad in the paper, doing a simple credit check and collecting a deposit and rent. Each town or village has its own set of rules and regulations. Homeowners would be wise to do their research before proceeding. Thank you again!
Carolyn Behrens April 26, 2012 at 05:11 PM
Good advice!!
Linda Kemp April 26, 2012 at 07:08 PM
Thanks for your comment Carolyn. This is a great opportunity to share vital information for others within the community! Thank to you to all who have taken the time to respond. Linda
house detectives September 27, 2012 at 02:36 PM
Home inspection before renting never hurts then you have legal document of property condition before it is moved into

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