4 Reasons You Should Consider Renting Your Layton Home Instead of Selling
Have you been thinking about selling your Latyon Home, but aren’t convinced you will be able to sell if for the price you want? Selling your home is not the only option to consider when you are considering making a move. Have you thought about renting your home instead of selling?
I am the owner of ProRenter Property Management in the Layton Area and I consistently get calls from renters looking for homes to rent in Layton and surrounding areas. The problem is I don’t have enough inventory to meet demand. Just yesterday I was chatting with a friend from high school on Facebook who is looking to rent a home in Layton, but was discouraged at his lack of options. I of course told him I would contact him if I got any new properties before he had to move. The only other advice I could give him was to make sure he consistently checked KSL.com for new rentals and call them immediately. This is a landlords ideal situation as there are more qualified renters than available homes for rent.
If you own a Layton home you should heavily consider renting over selling for these 4 reasons:
1- There is a much lower inventory of homes for rent in Layton than there is for sale.
There are currently 360 residential homes for sale in Layton according to www.utahrealestate.com. This website is the Multiple Listing Service for real estate agents along the Wasatch Front in Utah. The 360 homes listed for sale by real estate agents excludes any homes for sale by owner, so the actual number of homes for sale is most likely higher.
When we examine the number of homes for rent in Layton we find a much smaller inventory. I referenced www.rentler.com and found that ther are 36 single family homes listed for rent in Layton and 21 townhomes/condos for rent in Layton. The total inventory available for rent in Layton is around 57. While that number may be slightly higher if we consider that not every landlord will list their rental home on rentler.com, it is safe to say that an overwhelming majority of landlords in Utah list their rental homes on rentler.com. Rentler powers the portion of www.ksl.com that allows landlords to list their homes for rent. KSL is a local news affiliate in Salt Lake City and both landlords and renters use the site to list and rent homes and apartments.
2- Limited supply of rentals in Layton coupled with high demand means strong rents for landlords.
I have worked in the property management industry for more than 11 years and I don’t think I’ve experienced a stronger rental market than the current market. Homes that I list for rent in the Layton area experience a very low number of days on market (or time to find a qualified tenant). If fact the last few homes that I have rented in the Layton area were only listed for 2 days before I found a qualified tenant to rent them.
The relationship between supply and demand is a basic and core economic principal. As demand increases supply must also increase to keep prices in check. However, if demand increases while supply remains stagnant there will inevitably be an increase in price or rents in our situation.
3- Abundance of Qualified Renters vs. Restrictive Lending Requirements for Buyers
In today’s post “bubble” real estate market there are a few things to keep in mind. Gone are the days of everyone and anyone qualifying to purchase a home. Stated income loans which were used extensively during the real estate “bubble” are now much more heavily scrutinized and typically come with much higher interest rates. Lenders are required to scrutinize applicants more closely and down payment requirements are also much more stringent than in the past. This means that there are potentially fewer buyers who can qualify for financing in today’s real estate market then there were during the real estate boom from 2005 to 2008. For those looking to sell their homes this could mean stiffer competition which means lower sales prices and less money from the sell of a home.
Don’t forget about the recession and foreclosures where thousands upon thousands of homeowners lost their homes and became renters again. The fallout from the real estate “bubble” bursting and slow economic climate also made many would be homebuyers reconsider the “dream” of homeownership. What impact has this had on the rental market? The answer to this questions is that there are now more qualified renters than ever. Former homeowners who may have gone through a bankruptcy and or foreclosure are now viable renters. Millennials (those who reached early adulthood in the early 2000’s) are still hesitant to purchase homes yet have steady income and are great renters.
In Layton the rental market is strong with steady job growth, low unemployment rates, and the areas largest employer (Hill Air Force Base) drawing a consistent demand for temporary housing for Military families
While there are plenty of qualified renters and fewer available rental homes this doesn’t mean that renters are not selective concerning the condition of property they want to rent. As a landlord you want to attract a well qualified tenant and to do that your property had should be in good shape. I have a list of property standards that I recommend a property meet before it is listed for rent. You can view my property standards by clicking on the link below and going to the FAQ’s tab and look under the question “What needs to be done to my property before it is ready to rent?”.
4- Owning rental property can be a great wealth building strategy.
All of us want to retire one day and enjoy the fruits of years of hard work. Many of us embark on the same strategy for retirement. We work for 40 to 50 years and invest as much of our excess or disposable income into retirement accounts (401k, IRA, etc) hoping that we will save enough and earn enough interest that we can retire comfortably. However, have you considered the significant impact owning rental property can have on your retirement strategy?
When rental property is purchased and managed effectively it can yield a monthly cashflow. This means that after you have paid your expenses and mortgage on the rental property you should have some cash left over at the end of each month. The important thing to realize is that your tenant is effectively paying your mortgage for you each month. Therefore, your tenants over the life of the property will essentially pay for the home or apartment and you will eventually own the asset free and clear. Once you have enough equity in one rental home you could potentially leverage that equity to purchase another rental home and so on. Now when you retire you not only have your savings from your various retirement accounts, but you also have real property that can be sold (cashing out or rolling the funds into another type of investment) or you can continue to rent the property and enjoy a much higher monthly cashflow as the mortgage will be paid off. It is always a good Idea to consult with your Financial Advisor and CPA before embarking on any investment.
A Few Things to Consider Before Renting Your Layton Home
1- Will you manage your home yourself or hire a Layton Property Management Company?
2- Do you have a solid investment property strategy?
3- Will my property cashflow?
You may want to review some of my other blog posts that will help you with these questions. You can follow the links below to learn more:
Thinking of Renting Your Layton Home?
Property Manager vs. Do-It-Yourself Landlord
Top 10 Questions to Ask Before Hiring a Utah Property Management Company
Investing In Single Family Homes in Utah
While renting your Layton home can be a great alternative to selling you still need to make sure you are prepared to become a landlord. If you have questions or need help analyzing your home as a potential rental ProRenter offers FREE consultations to homeowners considering this option. You can learn more about our Layton Property Management services by clicking on the link below. Simply fill out the form if you would like a consultation and I will contact you.