The uncertainty of the housing market over the past decade or so has resulted in unintended rental homes for many. Homeowners who weren’t able to sell their homes but needed to move ended up having to rent out the space and became accidental landlords in a way. Now, with the market back on the rise, these accidental landlords are looking to sell their homes and get out of the rental business. Oftentimes, buying a home that was previously rented out is not any different than buying a new home or a previously owned home, but it’s important to be proactive during your home search process, so here are some potential issues that you might come across when looking at a home that was previously used as a rental property.
The overall condition of the home. In many cases the renters have been wonderful tenants and have kept up with all home maintenance issues. Some renters even make improvements to their properties (fresh paint, new carpeting, etc.). However, some renters don’t feel the need to keep up with maintaining the home because they don’t own it. Also, if the home has had multiple tenancies, check for excessive wear and tear. It’s also a good idea to request that your insurance agent checks any past insurance claims on the property.
The neighborhood. To put it bluntly, there may be a reason (other than a down market) that the owners had trouble selling their home before. Check out the surrounding homes; are they mostly occupied by renters? Or are most of them owner-occupied? This may not seem like an important detail, but owner-occupied neighborhoods are typically better protected against market-value fluctuations. Comparing the appearance of the home you’re looking at to other homes in the area can also help you get a rough idea of the home’s relative value. For example, if the home you’re looking at looks worse than surrounding homes, you may be able to get a better deal.
Is the home occupied? When the homeowner decides to sell the home, it may not always be in accordance with the tenants’ wishes. For this reason, it’s a good idea to tour the home when tenants aren’t home (they may say things to try to turn you off from buying the home).
Is the home unoccupied? If so, find out how long it has been vacant. In the past, homes that have been vacant for awhile sell for a lower price than rental homes that are occupied. Additionally, a home that’s vacant may not have received the attention needed. When no one is spending time in the home, many regular maintenance issues and other problems are overlooked. If the utilities have been shut off, see if you can have them turned on temporarily so that a home inspector can conduct a complete inspection of the home.
Do a quick inspection on your own. Make sure to look at all parts of the house including the basement, garage, and/or attic. Look for obvious signs of neglect or damage, such as holes in the walls, stained or ripped carpeting, damaged flooring, leaky faucets, mold, water spots (from a leaking roof). This will tell you how the tenants (or homeowner) has maintained the home. If the home has been unoccupied for awhile, you should be on the lookout for broken pipes, mold, damage from pests, and leaky roofs.
As with any home purchase, it’s imperative that you hire a home inspector. Bloggers at Realtor.com say, “Your home inspection will alert you to any repairs the home may need before you move in, and it can give you bargaining power if there are potential issues”.
Check out the original article from Realtor.com here.