The Latest Real Estate Trend: Homeowner Landlords

The Latest Real Estate Trend: Homeowner Landlords

Fixing clogged toilets and running background checks on potential tenants may not sound like everyone’s cup of tea.

But, across the U.S., a growing number of homeowners are opting to do just that: renting out their old residences after they’ve moved to other properties.

Earlier this year, a Redfin report found that as many as 39% of homebuyers intend to rent out their last home instead of selling it.

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The trend is partly a result of low mortgage rates—Redfin reports that 19% of current homeowners either purchased or refinanced their places between 2011 and 2013, when rates hit historical lows (below 3.4%).

The combination of falling home prices and soaring rents is another factor. According to CNN, rents have increased about 20% since the housing market peaked in 2006, while home prices are about 21% lower than they were at that time.

Unfortunately, increasing numbers of landlords don’t bode well for the housing market, Glenn Kelman, CEO of the brokerage Redfin, told CNN, because it contributes to the ongoing issue of low inventory.

Think you’re ready for life as a landlord? Be sure to keep abreast of local housing laws and choose your tenants carefully.

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