Reluctant landlords, accidental landlords or temporary landlords…call it whatever sounds best, but becoming a “landlord” is a designation that better be understood. The labels are often applied to Boston real estate sellers that decided to rent their Beacon Hill condo that didn’t sell for their price is a better strategy than selling it for a lower price. It’s almost always a bad decision for the many reasons covered in that article. But as the late night infomercials implore…”wait, there’s more”! The landlord experience brings things to the table that most never see coming; many downtown Boston real estate landlords still want to sell their Beacon Hill condo and fail to consider how that home (which didn’t sell pre-rental) will be received in its new status.

Showing a Rented Home for Sale

How anxious and receptive will a tenant be to allow prospective buyers access to the Back Bay condo for sale? Instead of owners that want to sell, agents have to coordinate through tenants – and they are not anxious for change. They are also less likely to be flexible and accommodating; buyers want to see homes on their schedule, not the tenants. What? 24-48 hours notice is required? The tenant needs to be there? The listing agent needs to be there? Make Back Bay condo buyers wait, let them lose the enthusiasm and they’ll disappear. Rented Boston North End condos show like…rented homes. While there is always the exception, it’s accurate to say that rented homes do not show as well as owner occupied or even vacant homes. Access is a challenge and most tenants have even less interest in getting the home show ready. Keeping the home show ready, clean and picked up, cleaning the yard and things owners usually take for granted. What kind of impression is made after access delays and unkempt homes?

Leases, Inspections, Appraisals and Closing Dates

Back Bay condos for sale with tenants not only have access problems; showings, contracts and the transaction process often hit potholes. Many rentals are listed with “tenant to remain in place until…” which can easily cause issues for buyers. If a home goes into a year rental in August, what sense does it make to list in April with months left on the lease? A tenant has certain rights once a lease is signed; selling a homes where the tenant remains after closing can be very challenging and requires a particular buyer and non conventional lender.

Accidental landlords often lack a full understanding of how a tenant influences the showing and sales process. Access, upkeep, cooperation during the transaction and even closing times can be challenges. Less than friendly relationship? Bet on it. Tenants understand the leverage they have.

Is there love between tenant and landlord or is it a contentious relationship? How will the appraisal and inspection go? Does the tenant stay there? Does the tenant talk about issues in the home that the seller failed to mention? Is the home clean and picked up for these visits?  How do the interior pictures in the appraisal look (already noted as tenant occupied) to the lender’s underwriter? If the home is on the edge of hitting price, are the appraiser and underwriter going to sign off or will they be concerned about upkeep? Landlords are surprised at how difficult an irate tenant can make life.

You Violated the Tenant’s Rights….and the IRS Called

The legal and accounting side of being a landlord are perhaps where most reluctant landlords come off the rails. It starts once the decision is made; failing to understand how to properly create an “entity” to protect personal assets is frequently the first landmine stepped on. The potential for lawsuits, insurance requirements (specific rental policies are required), tenants’ rights, negotiating rents, banking and accounting laws, tax filing requirements, writing contracts that cover the gamete of potential concerns and day to day management  requirements often blindside owners. Time to relist the home with a tenant in place? What are the legal aspects of taking MLS photos of their property? What happens if something is stolen or that accusation is made during the listing?

HGTV and the “get rich with real estate” scams are not the real world. Problems are not solved in 22 minutes of scripted TV or a 10 minute video. Being a landlord brings potential problems that cannot be anticipated.

Consider Fair Housing laws, laws surrounding tenant background checks, how to write legal and effective rental ads, the interview process, and of course, the eviction process. Tenants have rights; many more and much stronger than owners understand. Eviction? Piling their belongings on the curb? Better understand the law. Use a rental management firm? Excellent idea as long as their 10%-18% monthly fee is accounted for; and they simply pass on the costs (inflated of course) of repair and replacement items to owners. Self managed? Okay…

Accidental Landlords are NOT Investors

So does it make sense to rent a Beacon Hill condo for sale home fails to sell? The data is pretty clear that the answer is no. The costs of becoming a landlord, the costs of refreshing the Boston North End condo (even just paint and carpet) and the potential costs of trying to sell while rented are unlikely to be recaptured. Add to this the variables present in every local real estate market combined with the national and the global economic uncertainty. Investors are pros; home owners that swim in these shark infested waters are bail

Every Beacon Hill condo for sale eventually sells; but the three variables of EXPOSURE / APPEAL / PRICE must be aligned. Sellers ultimately control this entire process. Select and work with only professional agents. Ensure that the Back Bay condo shows well and is presented in the best manner possible. Price the home accurately and listen to the market. Buyers are out there but buyers are smarter and better educated than ever before; new and better resources are always being added.

New Seaport condos for sale Seaport


Sorry we are experiencing system issues. Please try again.

Author Profile

John Ford
John Ford
EXPERIENCE

Over the course of 20 years in the Boston downtown real estate market, John represented and sold numerous, condominiums, investment and development properties in Greater Boston and in the surrounding suburbs



In addition to representing Boston condo buyers and sellers, John is currently one of the most recognized Boston condo blog writers regarding Boston condominiums and residential real estate markets. John's insights and observations about the Boston condo market have been seen in a wide variety of the most established local & national media outlets including; Banker and Tradesman, Boston Magazine The Boston Globe, The Boston Herald and NewsWeek and Fortune magazine, among others.



HISTORY

For over 24 years, John Ford, of Ford Realty Inc., has been actively involved in the real estate industry. He started his career in commercial real estate with a national firm Spaulding & Slye and quickly realized that he had a passion for residential properties. In 1999, John entered the residential real estate market, and in 2000 John Started his own firm Ford Realty Inc. As a broker, his clients have come to love his fun, vivacious, and friendly attitude. He prides himself on bringing honesty and integrity to the entire home buying and selling process. In addition to helping buyers and sellers, he also works with rental clients. Whether you’re looking to purchase a new Boston condo or rent an apartment, you’ll quickly learn why John has a 97% closing rate.

AREAS COVERED

Back Bay

Beacon Hill

Charles River Park

Downtown/Midtown

North End

South End

Seaport District

South Boston

Waterfront

Brookline

Surrounding Communities of Boston
Contact
John Ford and his staff can be reached at 617-595-3712 or 617-720-5454. Please feel free to stop by John's Boston Beacon Hill office located at 137 Charles Street.




John Ford
Ford Realty Inc
137 Charles Street
Boston, Ma 02114

Comments

comments

Call Now