When the housing market collapsed, many condominium owners were unable or unwilling to pay their mortgages. Many were unable to sell either due to lack of equity in their properties. As a result, many owners rented out their condominiums, and became new landlords in the process. The number of foreclosure-displaced homeowners looking to rent helped to fuel this phenomenon, and a landlord-friendly environment was created.
The Changing Landscape
The real estate landscape is changing. A seller’s market is emerging as properties go up in value. Many people who lacked the credit to buy a home three to four years ago are able to do so today. This is leaving new landlords with a choice—continue renting, or sell the property.
According to one report, many new landlords enjoy their roles, and continue to rent their properties. Chicago-based consulting firm Appraisal Research Counselors estimates more downtown condominium leases were signed in the second quarter of 2014 than any quarter in the last ten years. The yearly high came in 2011, but 2014 is set to eclipse that mark.
Rent or Sell?
Some condo owners are profiting from the increase in average rental prices. Others are finding that, though their properties now have equity, there is not yet a great enough incentive to encourage them to sell their properties. Even if a landlord opts to sell, it may be difficult to find a property of similar value as real estate prices continue to increase.
The difference between choosing to sell or rent often depends on the owner’s short term and long term goals. In some cases, selling is still not hugely profitable, but remains a viable short-term option for people looking to break even and move on. Those landlords who continue to rent are thinking long-term, looking to achieve larger financial gains in the future.
Still, renting can cause headaches for the new landlord. Unlike corporate landlords with maintenance contractors, established systems for maintaining properties, and experience dealing with tenant complaints, the new landlord may not have the money, time, or patience to deal with those responsibilities. They are probably less familiar with Chicago landlord-tenant laws than corporate investors, and more likely to incur legal bills or city fines.
If you are a new landlord and want to continue renting your property, it is important to understand your rights and those of your tenants. If you are looking to sell, you will want an attorney who can help you each step of the way during the closing process. Contact The Slater Firm LTD, a real estate law firm experienced with renting, buying, and selling, to discuss your situation and help determine the right path for you.