Should I rent my home during a global health crisis? Here’s what the professionals say.
Photo by Jesse Roberts
Originally Posted On: https://www.verraterra.com/2020/05/should-i-rent-my-home-during-global-crisis/
So you’ve been thinking about renting the home you currently live in. Then, the world was dealt a crappy hand. 2020 has turned everything upside down. Should you change your plans? If you move forward with your rental plan, what new things do you have to consider in light of the health issues we are facing? This information can be considered now and in similar situations we may be faced with in the future.
Here’s what James Hsu, founder and owner of VerraTerra Real Estate and Property Management has to say. James is a local Seattle area real estate expert with fifteen years of experience.
I’ve been considering renting my home. Should I rent now during this health crisis or change my plans?
Renting your Seattle area home can still be a solid financial plan, especially if you’ve already been planning a move yourself. Here are answers to questions you may be asking.
If I decide to rent my home in 2020, what should I expect as a new landlord during the time we are being encouraged to stay-at-home?
Expect the rental market to be slower than a typical spring. Rental showings requests are happening, but are way down in frequency. Renters are experiencing uncertainty, so more are opting to extend their current lease rather than move. It’s even more important to be aggressive on what you’re asking for in rent. The pool of renters has shrunk significantly and there’s a lot of inventory. Price is going to be a major factor in determining how fast you can get your home leased out.
How do I determine the best rent to charge during the 2020 (or any!) crisis?
As a new landlord, it may be difficult to determine an appropriate rent during this time without professional insight. The normal rules are out the window. Hiring a professional property manager will help you arrive at a rental rate that will be competitive and get your home rented as quickly as possible.
At VerraTerra, we help our clients determine the best rental rate for their Seattle area home using comparable properties in your area. A renter looking at your house, especially now, is likely going to look at everything around you that’s similar in bedrooms and size. What others are asking for is the best metric to determine what your house can reasonably rent for.
Rental rates also depend on the condition of your house. If your house is pretty dated and a house a few blocks away is similar size and bedrooms but is fully updated, you can’t ask for the same rent as they are and expect a quick result. From a renter’s perspective it’s a pretty easy choice. If they have the choice between a fully remodeled house for $2000 or an outdated home of similar size and amenities for the same price, they’ll always choose the updated home. At VerraTerra, we will do a full, no obligation evaluation, considering all the factors and help you arrive at a competitive rental rate. Our goal is to help you maximize profit, but also rent your home quickly in an uncertain market.
Does VerraTerra visit my rental property to complete a rental analysis?
Typically yes. A site visit to your rental home would be done before we can offer a final rental price recommendation. We do this mainly to determine the overall condition of your property. However, considering the need for social distancing, we have chosen not to do site visits for occupied homes. Instead, we can use video or photos you provide. If your home is unoccupied, we can still arrange an onsite visit.
As a VerraTerra client, who is on my property management team?
When you hire VerraTerra to manage your rental property you get a property manager with experience in your neighborhood, a dedicated maintenance coordinator, bookkeeper and a 24/7 call center to handle tenant’s calls and issues.
I’ve never rented my home before. Should I allow pets? What about service animals?
Whether to allow pets or not is a personal decision. It’s important to remember, allowing pets expands your pool of potential renters significantly. This maximizes your chance at getting full market value, if not a bit more. Every competitive advantage matters, more now than ever. That said, pets can cause damage, so you need to consider this as well.
If I allow pets in my rental home, can I charge a pet deposit? What about service animals?
At VerraTerra, we have a default pet deposit and pet fee. It’s based on our years of experience. We’re happy to discuss the details when you contact us. If a tenant has a verified service animal, you must allow the pet.
Does VerraTerra make it a policy to charge tenants a cleaning deposit?
We don’t charge a cleaning deposit. Based on our experience, most cleaning deposits are usually not enough to bring a vacated rental home back to rentable condition. After a renter moves from one of our managed rentals, we complete a move-out inspection. We check to see if the home has been professionally cleaned, including carpets. Even the best tenants usually don’t clean to a “move in” standard. If the rental isn’t cleaned to our exacting standards, we have it cleaned and deduct those costs from the security deposit. This allows us to rent your home more quickly after another tenant moves out.
Who screens the potential tenant? What’s the most important factor in the tenant background check?
At VerraTerra, we obtain our background reports from a local, professional screening agency. The property managers review and make their own decisions, based on the facts, about who will be the most qualified tenant. The most important thing is the big picture. We don’t get too hung up on line items. The people we want to avoid with bad credit history usually have consistent history of credit issues, as opposed to others where a credit issue is an anomaly when looking at the whole picture. In addition, as we saw in the market crash in 2008-2012, we’re going to see a lot of renter applications in the coming months/years with some blemishes as a result of the economic and health challenges in 2020.
I’m currently living in the house I want to rent. How long before listing should I move out?
In a normal time, we recommend to start listing 30-45 days before vacancy. This way it will minimize the time the property sits vacant. With current health guidelines, we are limited in how we show an occupied home. Specifically, we currently aren’t able to show occupied homes. This policy will change as the government changes it’s orders. This means, you should vacate the home and have it rent-ready before it’s listed for rent.
How should I prepare my home to be rented? Do you help? Do you have people you can recommend for professional move out cleaning?
During the site visit (or after reviewing photos/videos), the information we gather will also include recommendations on how to prepare the house for renters. Owners can ask us to help prep the house (cleaning, repairs, etc.). Basic stuff we can help coordinate as part of our lease fee, like cleaning, simple repairs. Big projects, like asking us to remodel the kitchen, we can also handle but comes with additional project management fees, generally starting at 5% of the project cost and goes up depending on our scope of responsibility. We can provide recommendations for professionals to help. Many owners we work with move out and ask us to clean and prep, which we are happy to do.
How often do you inspect rental properties you manage?
Planned inspections are one time per year. Unplanned inspections are done as needed and as often as needed. The homeowner can request additional formal inspections. We charge $100 per inspection. We don’t recommend more than 2 or 3 per year as it begins to intrude into the tenant’s enjoyment of the property.
What’s included with the inspection?
VerraTerra will provide photos and a written report for each rental property inspection we complete.
In spite of recent health restrictions and uncertainty, you can still successfully rent your currently owner occupied home. Using a professional property manager who’s experienced with rentals in your Seattle area neighborhood will increase your success and reduce the stress involved. VerraTerra manages many properties in north King and south Snohomish counties. We are happy to provide a no obligation rental analysis for you. Click here to request yours.