If you have a Fulbright grant to study literature in Sweden, if you want a getaway from the suburbs to live near the Inner Harbor for a year, or if you simply can't sell your home for what you think it's worth, then you could be a prospective landlord.
When thoughts of renting roll around in your head, you're bound to wonder what level of rent your home could command. But if you think that judging your local rental market will be extremely difficult, then think again.
"You don't have to be a rocket scientist to accurately test the rental market in your neighborhood," says Monte Helme, a vice president with the Century 21 realty chain. He and other real estate specialists suggest a few easy ways to estimate the rental value of your home before you commit to renting:
* Seek information from a real estate firm that handles rentals.
Many realty offices that manage rental property can give you a good estimate of local rents by checking data on their computers and in the Multiple Listing Service, Mr. Helme points out.
This is a direct way of getting information on properties like yours. Yet it doesn't commit you to renting -- or to hiring that realty firm to rent the property for you. (Most home rentals are handled without the help of professional property managers, who typically ask for a month's rent in exchange for finding a tenant.)
Remember, the primary business of most residential real estate companies is sales rather than rentals. Most will gladly offer free information on rental values in the hope that some day you'll sell your home through their office, Mr. Helme says.
* Check ads for home rentals in your local newspaper.
You can get a good general sense of the rental value of your property by surveying the papers that serve your community, says Mary Jo Button, sales manager at the Golden Ring office of Prudential Preferred Properties.
It's more important to find ads describing property that's similar to your own than it is to find nearby homes, she says. It's better, for example, to compare your three-bedroom Parkville town house to a three-bedroom town house in Carney than to compare it to a three-bedroom rancher in your neighborhood.
* Telephone the people who are advertising property to get a sense of the market.
If you're diplomatic when you call, most people who are renting their homes will provide you with information about the market as they've found it -- even though you acknowledge from the beginning that you're not a prospective renter yourself, says Ms. Button, who has had extensive experience in making cold calls through her realty sales work.
"Could you do me a favor?" Ms. Button suggests as your opening line. "You'd be amazed at how many
people will help you if you're polite. Anyway, the worst thing that could happen is that they'll slam down the phone."
In questioning another landlord, first make sure you know the basics on his property. Where is the home located? How many bedrooms does it have? How large is the yard? Last, and most important, make sure you know how much rent is being charged and whether that includes utilities.
After you've established that you're dealing with a similar property, ask the landlord about the impact of his ad. How many calls has he had? What's the profile of the people calling? What has been the reaction to the rent asked? How many showings has he conducted? If the property has already been rented, how long did it take and how much did the tenant agree to pay?
If, based on your research, you estimate that the market for your rental would yield less than you'd hoped, you might want to consider positioning your home as what Ms. Button calls a "niche rental." The idea is to cater to a particular segment of the market where demand is high but supply is low. She offers two possibilities:
* Consider tenants with pets.
Since most apartments ban dogs or cats, the demand for rental housing where the tenant could keep a cherished pet is keen. The likelihood is that you'll attract a large number of prospects and get 5 percent to 10 percent more in rent than a like
property where pets are prohibited, Ms. Button says.
Of course, after the tenant and pets depart, some of your extra cash may have to go for fumigation or repairs to carpets or hardwood floors. And don't count on covering such costs with a security deposit, Ms. Button cautions. It's not uncommon for a tenant to leave without paying the last month's rent -- on the assumption that his security deposit will cover the unpaid rent.
Still, if you have reason to trust the tenant and consider the pet relatively harmless, this could be a satisfactory way to increase rent, she says.
* Consider renting on a month-to-month basis.
Most landlords want the conventional one-year lease when they rent. They don't want the aggravation and expense of having to rent and re-rent the property on a frequent basis. What they may not realize, however, is that a short-term or flexible lease can attract not only high-income tenants but premium rents as well, says Ms. Button.