Market conditions prompt spike in single-family home rentals

With the rising tide of foreclosures in a housing market struggling to keep its head above water, renting has become a life preserver for some Central Florida homeowners in today’s challenging economic market. Last year, we experienced a significant spike in area single-family home rentals, and we expect more of the same this year as homeowners look for ways to wade through troubled economic waters.

The reasons for the spike in home rentals are many and varied. Some homeowners want to avoid going to foreclosure or short sale by generating a rental income to cover all or a portion of their monthly mortgage, while others have found a new home at a great price in today’s buyer-friendly market and simply want to hold on to their existing home until market conditions improve before they sell it. Still others have inherited a property in a trust situation and want to generate some income, until they decide market conditions are more favorable for selling their home.

As far as prospective renters are concerned, some just prefer renting a home rather than an apartment or condo, while some professionals relocating to the area want to rent a home while they get acquainted with the area and all it has to offer. They want to take some time to look for the right neighborhood and the perfect home for their family.

In each case, it’s a nerve-racking process that requires a lot of hand-holding because homeowners want every assurance that the people moving into their home are qualified and responsible tenants.

To gain their assurance requires a thorough screening of prospective tenants, which includes checking credit scores, housing/rental history, employment history and outlook, and making sure there aren’t any other red flags that might jeopardize the rental agreement. On the flip side, it also requires carefully screening landlords to make sure their home is not on the brink of foreclosure. That way, both renter and homeowner have peace of mind.

Typically, there are three types of management options: lease management, tenant management and property management. Whatever option is selected, it is important that homeowners and renters are realistic when it comes to the rental arrangement. Pulling comparable transactions will provide realistic rental rates based in part on livable square footage, upgrades and amenities in the home, and the home’s age and location.

Jackie O’Leary and Jeff Hall head up the property management division at Winter Park’s Fannie Hillman + Associates (www.FannieHillman.com). They can be reached at [email protected] or [email protected], or by calling 407-644-1234.