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When times are tough … rent

When Dave and Gina Schudi of Phoenix went house hunting last year, they knew the time was right to buy — not sell — a home.

When Dave and Gina Schudi of Phoenix went house hunting last year, they knew the time was right to buy — not sell — a home.

So when they did purchase a new one, they rented out their old home.

“It all depends on the market,” said Dave Schudi, who plans to sell the old house eventually. “We’ve got good renters in there.”

Falling house prices and a slow market are forcing more homeowners to consider renting their properties.

It’s something realtor Julia Vakulenko suggests to potential clients.

“Basically, we ask all the people who contact us, ‘Must you sell it right now?’” she said. “Most likely, it will just sit there or maybe sell below the market value.”

For many, the role of landlord is something they’d never considered. If done right, however, renting out a home can help the owner ride out the housing slump, said Vakulenko. But the process does require doing some research, said Vakulenko, who owns five rental properties.

She often refers clients to property management companies who can determine what their home would rent for and whether there’s a market for it. Homeowners are often disappointed to learn that their home would rent for less than their mortgage payment, added John Nuzzolese, president of the New York-based Landlord Protection Agency.

“Whether it’s for sale or for rent, it’s only worth what people are willing to pay for it,” he said. “People have to be realistic and put themselves in the tenants’ shoes.”

Real estate analyst Danielle Babb often sends people to rentometer.com/ca to see what the going rent is in their area. The website allows users to see what comparable properties in the area charge.

Once you’ve set a rent range, determine your demographic — students, families, young professionals — and market the house to them, said Babb, author of The Accidental Landlord. Babb, who has owns 27 rental properties, wrote the book after watching friends and colleagues trying to rent out houses they couldn’t sell.

“You’ve got to think like a renter. There’s lots of availability,” she said. “They’re going to choose the most exciting option.”

Renting tips
• Familiarize yourself with local laws dealing with rental properties. It’s important to understand the eviction process, how to handle security deposits and what type of access you have to the property once it’s rented.

• Determine whether you want to select the tenant and handle property issues or hire a company to do it. If you take on the responsibility, you are obliged to fix any problems (leaky faucets, broken furnace, etc.) or find professionals to do it.

• Develop a rental application. Ask questions on the application that will help you quickly determine whether you want this person for a tenant. Consider asking about pets, smoking and employment, for example.

• Ask for references. Call former landlords and ask about the person’s rental history.

 
 
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