First Person: Preparing Our Home for the Rental Market

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Surprisingly, people in my neighborhood are putting just as much effort, if not more, into renting out their homes as they would to sell them. With an increasing number of homeowners renting out their homes instead of selling them, it's becoming more competitive. Renters have higher expectations because they are paying top dollar to rent out the homes. My husband and I don't want to sell our Florida home until the housing values recover. In the meantime, we are preparing our house for the persnickety rental market since we expect to move in the next few years.

Making the decision to rent

Our first step was to decide whether it would be financially advantageous for us to rent rather than sell our home. Since we recently refinanced our home, we had to pay for an appraisal. Therefore, we have the most accurate estimate of how much our home is currently worth. We paid $183,000 for our home, but the appraisal said it's only worth $130,000. Meanwhile, a property manager told us we could rent out our home for $1,350. Zillow says our home could be rented out for $1,289.

Improving our curb appeal

Just as home sellers do landscaping and cosmetic fixes to improve curb appeal, people trying to rent out their homes have an advantage if their home presents well. I noticed several former foreclosures on my street that once looked dingy now have a clean, bright appearance. Before placing a "for rent" sign in the front lawn, the new owners went to great lengths to paint, fix broken windows, add landscaping, put down new sod and water. To prepare for the rental market, we pressure washed the outside of our home. I also replaced the flat paint in my home with a stain finish so that I can more easily clean fingerprints and stains.

Removing and adding furniture

A property manager told me I could ask a much higher rent if I wanted to rent out our home as a furnished house. With that in mind, we began considering which furniture items we could place in storage. We were able to swap out a few pieces that relatives no longer wanted. According to the property manager, we could rent out our home for an additional $200 a month if it included all the beds, sofas, chairs, dining room set and other key furniture pieces.

Interviewing prospective property managers

My husband and I weighed the pros and cons of hiring a property manager versus doing it ourselves. One Realtor said she could help find the renter for the equivalent of one month's rent. Then she would step back and expect us to handle collecting the rent checks every month. However, we decided that it's best to let a professional handle the difficult details of managing a property. The property manager who made the top of our list also takes care of any repairs. We met with about a half dozen property managers while exploring our options.

In order for us to list our home, we would need to see the home values return. Since our home is worth $53,000 less than we paid and home values have been going up for the past year, we expect to wait a long time. We figure it may take at least 10 years before we can sell our home. In the meantime, it would be nice to have someone else making our monthly mortgage payment instead of locking in a substantial real estate loss.

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