Stuck with Your Home? Consider Renting Instead of Selling
In today’s evolving real estate landscape, homeowners in Phoenix, like many across the nation, are grappling with an unexpected dilemma– they can’t seem to sell their homes. The Phoenix real estate market has witnessed a significant shift as potential sellers face challenges in finding buyers willing to meet their asking price. As a result, some homeowners are exploring an alternative path: becoming landlords and renting out their properties.
The Accidental Landlords: Unintentional Real Estate Entrepreneurs
These homeowners, often referred to as ‘accidental landlords,’ never initially intended to delve into the world of real estate leasing. However, the prevailing circumstances in the Phoenix housing market are compelling them to consider this unique option.
The Shift in the Housing Market
Several factors contribute to this dramatic shift in the real estate landscape, transcending state boundaries:
- Soaring Home Prices: The escalating home prices in recent years have made homeownership unattainable for many first-time buyers. The rapid annual increase in home values, sometimes as high as 20%, has placed homeownership out of reach for a significant portion of the population.
- Historically Low Interest Rates: The federal government’s provision of remarkably low interest rates and the availability of 30-year fixed loans at less than 3% interest fueled a frenzy of buyers. This surge in demand resulted in bidding wars and led to some buyers waiving property inspections, often paying prices well above the appraised value of the property.
- Buyers’ Remorse: With interest rates more than doubling in recent months, homebuyers are grappling with the stark reality of increased borrowing costs. A survey revealed that 75% of homebuyers in the past year have regrets about their home purchases. Some settled for properties they didn’t truly desire, accepted less-than-ideal locations, or overlooked significant flaws out of fear of missing out.
- Stuck with Overpaid Homes: In the past decade, sellers could virtually sell any property at nearly any price. However, recent homeowners who made their purchases over the past nine months and often paid a premium now find themselves unable to sell for more than their purchase price. Life events may necessitate a move, and these homeowners are now left with properties worth less than what they paid for. Unfortunately, there are few potential buyers interested in such properties.
Considering Renting Your Home
For homeowners in Phoenix contemplating the transition from seller to landlord, it’s essential to weigh the risks and factors involved in the process. Renting out your home requires careful considerations, including:
- Pricing Your Property: Determining the right rental price to attract potential tenants while ensuring profitability.
- Effective Advertising: Reaching out to prospective renters through successful marketing strategies.
- Thorough Screening: Conducting comprehensive and legal applicant screenings to secure reliable tenants.
- Lease Agreement: Crafting a proper lease agreement that safeguards your interests and follows state and federal rental housing laws.
- Rent Collection: Ensuring consistent and timely rent collection.
- Property Maintenance: Being prepared for regular maintenance and repairs.
- Legal Compliance: Adhering to all state and federal laws governing rental housing.
For Phoenix homeowners contemplating the leap into the world of ‘accidental landlords,’ there are resources available to assist in making an informed decision, including a helpful rent vs. sell calculator.
In an evolving real estate landscape, sometimes, when life throws you a curveball, becoming a landlord can be the perfect pitch. If you’re looking for more assistance, give us a call at (480) 834-9200 or visit our office at 3140 N. Arizona Ave., Suite 117, Chandler, AZ 85225.