Any homeowners out there nervous about selling in time for move to grad school?

[MadScience]

Hello! I wanted to ask and see if anyone on here is a homeowner that will be needing to sell there house/townhouse/condo when they move to grad school? I'm in a bit of a different situation than most of you (I think) since I have been out of school and working for a few years, during which time, I found buying a home came out to be cheaper than renting in my area. So now I'm faced with the dilemma of selling before grad school starts in the Fall (or finding someone to rent) and am getting nervous seeing how bad the housing market is right now. Definitely don't want to be stuck paying a mortgage and a rent! Was wondering if anyone had any advice/suggestions or if you're just as nervous as I am!

[Lilac13]

I am nervous about this as well. I don't plan to sell though (primarily because I'd be losing quite a bit of money at this point if I did). I am hoping to find someone who will rent my condo. I think my chances of renting are much better than selling at this point. I've been viewing the rental statistics in my area over the last few months and things look pretty good in terms of places being able to rent. I just hope it remains that way through the summer. Good luck!

[MammaD]

Very afraid. I'm moving my 3 kids with me and I'd like to move us only once -- not have to change schools again once we're there, etc. Thankfully, I'm in a more expensive market here and my house is in a desirable location, so it'll sell and I won't take a loss. I'm more worried about whether/how we'll find something in our new town. We're planning to stay there indefinitely, even after I finish school, so our kids can get through high school in one place. Very optimistic of me considering I don't even know yet if I'll be accepted!!

[MadScience]

I am nervous about this as well. I don't plan to sell though (primarily because I'd be losing quite a bit of money at this point if I did). I am hoping to find someone who will rent my condo. I think my chances of renting are much better than selling at this point. I've been viewing the rental statistics in my area over the last few months and things look pretty good in terms of places being able to rent. I just hope it remains that way through the summer. Good luck!

 

Yeah, I think I would likely end up losing at this point too by a few grand. I have also heard horror stories about renters destroying the home which really makes me nervous, especially since I will be out of state and unable to drop by if needed. There's one other townhouse in my community that is trying to rent and has been listed for 5 months now with no bites, and although my unit is much larger and I could offer for a similar price without losing money, I'm still worried. Oh well, let's keep our fingers crossed that everything turns out smashingly I hope you have good luck in renting your place out and hopefully I can too!

 

Very afraid. I'm moving my 3 kids with me and I'd like to move us only once -- not have to change schools again once we're there, etc. Thankfully, I'm in a more expensive market here and my house is in a desirable location, so it'll sell and I won't take a loss. I'm more worried about whether/how we'll find something in our new town. We're planning to stay there indefinitely, even after I finish school, so our kids can get through high school in one place. Very optimistic of me considering I don't even know yet if I'll be accepted!!

 

That's awesome that your area hasn't been too badly affected by the market! Wish things would start turning around here a bit faster :/ Good luck with selling and finding a new place! And only a month or two until we should all know where we're heading, so good luck with that too!

[MammaD]

Oh, my area took a hit, but we got in this house 11 years ago before the bubble peaked (then burst). We lost about $80K in appreciation but are still ahead of where we bought, plus the equity we've built. Now, though, we have a lot of little improvements to make and a LOT of purging to do if this place is going to be show-worthy!

[Usmivka]

...I have also heard horror stories about renters destroying the home which really makes me nervous, especially since I will be out of state and unable to drop by if needed. There's one other townhouse in my community that is trying to rent and has been listed for 5 months now with no bites, and although my unit is much larger and I could offer for a similar price without losing money, I'm still worried....

Speaking as a long time renter and recent purchaser, I have a few thoughts on this.

 

1.  If you don't want your place trashed, take the time to look for quality renters. They exist, you just have to advertise smart and be willing to sit on your unit until you find the right person (assuming it is competitively priced, if you aren't getting any bites at all move on to number 2). That means advertising smart (saying exactly who you are looking for, what sort of references you expect, NOT relying only on Craigslist) and not taking the first bite you get. I'd also note that while many forms of housing discrimination are illegal, students are not a protected class. Be smart and don't rent to young college kids that are moving out of their families homes for the first time. Take one's that have already mellowed in a dorm or are willing to put down big damage deposits in there own name--it can be tempting to take a parent as a cosigner and assume everything is covered, but parents can be awful stubborn about making right after the fact, and the kids may be less responsible if they know daddy is going to bail them out.

 

If you have a multiunit building or are renting to groups of people, this quality renter thing is even more important. I've almost always lived in multi-unit or multi-room (rented separately) buildings in high-demand/low vacancy markets, so this is a little different, but I go out of my way to emphasize why a landlord should want me as a tenant. I always aim to be in a place multiple years, and landlords are often willing to cut a break if I make that clear up front. In fact, other than moving for grad school, I've only ever moved because of shitty neighbors, and those have always been the fault of my landlords (and even when I moved for school the neighbor situation was getting sketchy)--if you rent to people you wouldn't want to live next to, why would you think your other renters would be OK with it? If you have a group of renters, make sure the lease holds them all accountable for any damages (you can go after any in court) and you don't allow sublets except by written permission. This will insure that the more responsible ones in a group keep things inline, and that they can't bail and sublet to someone who has less pull/ability to keep the group in check. I'd also have a clause written into the lease regarding illegal activity (including noise complaints) and your right to evict. Eviction is a pain, so hopefully it doesn't come to that, but shit is less likely to go down if you warn of consequences on the lease.

 

2. Don't overcharge. This seems obvious, but as the owner and a recent occupant of your place, you have (I nearly guarantee you) an inflated opinion of its worth. Just because the place two blocks away can get a certain price, doesn't mean yours has the same features that warrant that rent. If you get lots of demand at a given price, you can always accept an offer of higher than what you were asking (but I wouldn't solicit it or use someone elses offer as a bargaining chip like you might in a home sale, that can get people pissed off and make whoever does finally rent it less likely to stay multiple years or tolerate future rent increases. If someone seems like a good tenant, but can't afford your price, be flexible and either drop (to get a good long term tenant) or have them perform services instead (keep the yard up, eg). In most places it is a buyer's market, so you may not get the price you need to make money on it. You can aim to just break even and hope things improve later or minimize losses until the unit can sell if you can't make money long term, but you probably can't finance your new home on the old one in the current market. Sometimes it is just easier to sell (a few grand loss is nothing compared to your legal and tax obligations as a landlord!). If rent is too expensive relative to a mortgage (and you can look into this pretty easily), potential tenants will do what I did and buy a place. My mortgage is about 35% cheaper than my rent was, and is price competitive with renting even if I have to sell in only two years. Good tenants also tend to be the ones who can get financing, concentrating nonideal tenants in the rental market, so again, just selling your place is probably better for you in the near term.

 

3. Don't be a crappy landlord. High turnover is expensive. You have to repaint, do repairs more often, potentially pay to relist. Be a nice person. Even better, hire a professional management/servicing company to collect rent and deal with problems and repairs. This can be more expensive (less profit to you), but it insulates you from bigger unexpected expenses and legal issues. Especially if you are out of state and don't have a local fixer, you are halfway to being "a scuzzy absentee landlord"--the tenants won't feel as responsible to you, the courts are more liable to side against you, and the community will be a lot less forgiving and helpful if things go wrong and you need help.

 

Anyway, I know this wasn't really solicited, but I see too many acquaintances falling into the landlord trap and have been at the receiving end of too much landlord negligence to not have opinions on this.

Edited January 8, 2013 by Usmivka