Some home owners may find they need to relocate for a job, but can’t afford to sell their home yet so they opt to put it up for rent. But jumping into the landlord role is not always easy, particularly for novices.
“When the market dropped, many people emerged with a life event prompting their need to move,” Todd Allen, a real estate professional in Northern Virginia, told CNBC. “Fortunately for many in the D.C. metro area with higher incomes and lending guidelines softening a little, individuals and families were able to qualify for the purchase of a second home, but their new landlord status did not necessarily generate positive income—often they incur a loss. Furthermore, many of my own clients have learned many other downfalls in being a landlord.”
The growing number of “accidental landlords” is one of the reasons behind today’s low inventory issues, real estate professionals say. “Usually a buyer is also a seller, making the transaction a wash in terms of inventory, but if the buyer is not a seller, and instead becomes a landlord, inventory takes a negative hit,” CNBC reports. Have you seen this trend emerging near you?
Source: “Underwater homeowners find they’ve become accidental landlords,” CNBC.com (May 24, 2013)