Being A Landlord By Default
|September 3, 2009||Posted by Roshawn Watson under Uncategorized|
Why the Increase in Reluctant Landlords
Homeowners who have relocated due to new jobs but can’t sell their homes or those who want their home values to return before they sell are becoming landlords to offset their mortgages and other expenses. Allstate, the U.S. second largest home insurer, reported that there is a 27% increase in homeowners who converted their homeowners insurance to landlord policies compared to the same quarter last year. In many cases, these homeowners are just looking for some relief from their mortgages and related expenses.
However, many homeowners are unprepared for the additional burdens of finding and retaining quality tenants, the stress of maintaining the property professionally, and the increased responsibility for bookkeeping. Renting out a property is functionally similar to running a small business, yet reluctant landlords are often lacking and unwilling to learn the necessary tools required to do it effectively. After all, being a landlord is just a “temporary fix” for many. One way to make sure that the property is managed correctly is to hire professional property managers, which typically costs 3 to 12% of rental income. Unfortunately, this often erodes any potential profits, but for these default landlords making profits is not their primary motive anyway.
Leasing the Property to Tenants May Not Solve Problem
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Copyright 2012, Roshawn Watson, Pharm.D., Ph.D. All Rights Reserved.