Shop former rentals for housing deals
A couple in their mid-30s are struggling to find an affordable house before their first baby is due in five months. That’s an arduous chore because they live in an extremely highcost area.
Considering their income limits, the couple in this true story have latched onto a potentially good buying strategy, says Ashley Richardson, a veteran real estate agent affiliated with the Council of Residential Specialists (crs.com).
Sid Davis, a long-time real estate broker and author of “A Survival Guide for Buying a Home,” estimates that those who purchase a well-chosen rental home can save as much as 30 percent off the market value of a similar property in better showing condition. Here are a few pointers for cash-tight buyers pondering a rental property:
1. Try to plan your first visit when the renters are away. Those living in a rental unit are typically — though not universally — unhappy about the idea that their landlord is making them move.
2. Make sure you obtain an in-depth home inspection. Although many rental properties are overseen by professional management firms, they rarely receive the same level of attention as owner-occupied properties. That’s why it’s critical to make any offer contingent on a satisfactory home inspection.
3. Obtain cost estimates for all the repairs you’ll need. Prospective buyers of a rental property — or any home, for that matter — should determine in advance how much needed repairs will cost. Get estimates for all the repairs on the inspector’s list before finalizing a bid. Then make sure these expenses are factored into the price they negotiate.
4. Place location at the top of your list. In many neighborhoods where the real estate recovery is still robust, buyers continue to outnumber sellers.