Want to Check That Rent?

For several reasons many more people today are renting rather than buying. Even with house price affordability at it's highest point in recent history and low interest rates there is a strong market for rentals. Prices have strengthened and demand has increased often making it a race to find a new listing and making sure it is a safe home to rent. As a tenant, you need to ensure that the landlord is solvent, and the home is not going into foreclosure so that you don't find your deposits gone and yourself evicted and out on the street by some bank.

At all price points rentals are common today. Many companies are refusing to offer relocation packages that offer to buy out an executive's home when he is required to move so many executives, unsure of how long they will be in a post are looking to find a home that they can live in and move on from when their job demands another relocation. 

Younger buyers unsure of the job market, prefer to rent, so that if they need to move for a new job they are not tied to an area because they own a home that needs to be sold.

On Zillow today was a post on How to Negotiate Your rent a decent article but very much designed to promote their Rent Zestimates. But Rent valuations are nothing new, Rentometer has been doing this for some time. 

How accurate are these valuation tools, somewhat. Like Zillow's Zestimates for home price valuations they do not know exactly what the home being offered for rent has as standard features. Granite counters are more desirable and worth more than Formica counter tops for example. But they do give an indication and a guide. Best is to use a local Realtor who handles rentals once you have zeroed in on an area that interests you.

Compensation for Realtors on rentals is low depending on the price point, so many Realtors won't bother handling them as they are not cost effective. Generally one months rent is split between the listing broker and the broker representing the tenant, many broker firms have separate departments handling rentals, so their compensation to agents is much lower as a result of supporting these departments, leaving an agent representing a tenant on a $1000 a month property with about $300 as their commission. As commission rates are higher on sales many agents prefer to focus specifically on sales and not handle rentals. Obviously if the price point is higher, the agent may see a value in helping a tenant find a place to live.

I handle rentals for several investors, and as a result get inquiries from potential tenants seeking help to find other homes when a unit is already rented. The biggest issue is finding homes where landlords or the condo or homeowner association will allow pets even with a pet deposit or higher monthly rental fee.

I have found in the last two years rentals have made up a larger number of the transactions I have done throughout the year. Handling a lease is different to handling a sale, like all real estate, not especially complicated unless something goes wrong and that is where using standard forms and using an experienced agent can save you time and money.