Most homeowners reject the idea of renting out their property, even for a short period. They fear damage and nasty complications.
But Mary T. McCall, a longtime real estate broker, says the positives of a temporary rental could outweigh the negatives - especially if you're convinced that home values are on the upswing in your area.
"This could be a wonderful time to lease, because there are so many good tenants out there now. These are people who - due to hard times - had to let go of a house through foreclosure or a short sale. They're just renting until they get their credit back," says McCall, president-elect of the Council of Residential Specialists (www.crs.com).
One group who could benefit from renting out their homes are older owners who want to check out a new location for retirement but don't have the funds to float a house payment in addition to a short-term lease in the new area.
The rent-rent option could also work well for those whose plans are unclear due to divorce, death or drastic career change.
Housing prices are on the rise throughout America. But McCall says the main reason some owners are now leasing is to buy time until property values increase even more.
"A single-family home is like a precious metal - silver or gold. People know it has ups and downs but will go up eventually," she says.
To illustrate how well a temporary rental can work out, McCall tells the true story of a newly retired couple who own a pale-green ranch house but have moved to a custom-built house in their home state. Because they believe their property will sell for more in a year, they're leasing it to a divorced professor with three school-age children.
"The professor is keeping the place absolutely pristine. There are no problems whatsoever," McCall says.
But obviously some who rent out their homes aren't so lucky. Because horror stories abound, she urges homeowners to exercise caution before deciding whether to rent. Here are a few tips:
• Gather information on your local rental market.
What if the supply of rental properties in your area outstrips demand? In that case, you'll want to factor this element into your plans.
As McCall notes, most realty offices have at least one rental specialist. This person can help you gauge the supply/demand ratio for rentals in your area and how much rental income your home would likely fetch.
You can also garner clues by looking at listings for rentals in your area as featured on the Multiple Listing Service. To view these, simply visit the website of the National Association of Realtors (www.realtor.org).
• Check the numbers on the financial impact of renting your home.
Most homeowners want assurance that they'll at least break even on their rental or, better still, enjoy a positive cash flow after taking into account their mortgage payments, taxes and insurance costs, says Leo Berard, charter president of the National Association of Exclusive Buyer Agents (www.naeba.org).
When running the numbers on a possible rental, Berard says you should also factor in upkeep costs.
"Don't forget that if your water heater breaks in the middle of the night or your air conditioner fails on Labor Day, you'll need to pay for a contractor to fix it," he says.
Also factor in the tax implications of becoming a landlord. To do this, Berard recommends you contact an accountant.
• Make sure your home is vacant before trying to sell it.
Mark Nash, a real estate broker, says it can be tough to sell a home with tenants still living in it.
"Tenants can undermine your sale. If they don't want to move, they might deliberately make your house messy to discourage buyers. Or they might try to block showings," says Nash, author of "1001 Tips for Buying and Selling a Home."
To avoid complications, try to time the rental term to ensure the property will be vacant for at least two to four weeks before it goes on the market. With the tenants gone, you can quickly resolve any cosmetic or repair issues that might prove a barrier to a good sale.
• Consider hiring a professional manager for your rental.
If you want to avoid the hassle of dealing with tenants on a day-to-day basis, Nash recommends you hire a professional manager. You'll still have to pay the repair bills, of course. But you won't need to field phone calls from unhappy renters demanding an immediate plumbing or electrical fix.
"Many people are naive about what it means to become a landlord. That's why a professional property manager can be a big plus," says Nash, who has owned a number of rental units in the past.
• Try to damage-proof your property before the tenants move in.
When homeowners sell their property, most detach themselves emotionally. But that's not the case when they lease, Nash says.
"When you rent, the emotional cord hasn't yet been cut. You're still territorial about your place," he says.
No one can promise your home won't sustain serious damage while it's leased. But Nash recommends you take several steps to reduce the risk. Repaint your walls with an easy-to-clean semi-gloss finish. Seal your hardwood floors with protective coating. And replace valuable light fixtures with inexpensive ones.
"When you're renting short-term, you don't have to worry about becoming a professional landlord. Just hang in there until the circumstances are right to sell," he says.
Ellen James Martin, a former real estate editor at The Baltimore Sun, gives advice for anyone buying, selling or financing a home.
