By request, the landlord-tenant hell series is going to explore the question of land lording. In the current market, there are many faced with the prospect of becoming an "accidental landlord." (We have a commenter by that name, too!)
I start with an encore publication of an answer I gave about an “accidental landlord.” First published, October 2008:
One of my clients wrote this:
Hello, I had a question... today I noticed the same house is both for sale and for rent... does this often happen? [Attached here was a link to a rental notice on Trulia for $1,995 a month. This house is on my client’s MLS list for sale around $400,000.] It seems like the way the system works, sellers agents would be very reluctant to see a house offered for rent. I was pleased to see the ratio of price-to-rent was relatively low. I'm curious what, if anything, this means about the state of the Market, as they say.
Did you notice that the same agent is doing the rental and the sale? That means he will sell it now, or sell it later. So his disincentive is minimal.
Renting homes that don’t sell is happening more and more in the unstable market. It means that sellers are insecure enough to be willing to rent a place until next spring so they don't need to sell it during the winter slump. Also, he won’t have to heat an empty house all winter.
When someone is selling a home and it isn’t selling, does it make sense to rent it? If you rent it, you are now an accidental landlord.
In this case, the rental price is $1,995 a month. The mortgage for the current owner is just under $2,500 a month. They will be short about $500 a month on their carrying costs, based on what they paid for this home when they bought it.
Winter is coming. Therefore so are heating costs and the risk of frozen pipes if the seller leaves it empty and keeps trying to sell it.
As a seller, would you rent it or wait for an offer that would let you break even and be done with it?
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