Like last year, the slow New Tampa Real Estate market has led many would be sellers to become landlords. Since finding a tenant is generally the first order of business for most and the days of placing an ad in the local paper to find a tenant are over, knowing who is looking for a rental home and how to find them is very important.
There are many different types of people searching for a rental home. These reasons are typically overlooked by landlords that had not planned on renting their home, but the needs of these tenant prospects vary and one must demonstrate the ability to meet these needs in order to have them submit an application. A closer look at the types of people looking for a rental home in New Tampa will better prepare the owner for the reality of the New Tampa rental market.
Some of the rental prospects in any market are people with good income and excellent credit that have just decided to rent instead of buy. While many homeowners do not completely understand why people make this decision, every landlord wants the ideal tenant with good income, credit and no criminal background. The number of people that fall into this category has risen the past year as some are more fearful of buying as the prices were declining.
The surplus of rental homes available in New Tampa has created a new type of tenant... those that save a substantial amount on housing by renting instead of buying. This is most true on the higher end homes, but it certainly applies to almost anything in New Tampa right now. Many do the math and realize that for $2,000/month they can live in a home that would cost about $1,000/month more to live in if purchased. An example would be a New Tampa Pool Home offered for sale at $400,000, that is also listed for rent for $1,950/month. Even with a 20% down payment, the $320,000 mortgage would have a monthly payment of ~$1900 just to cover principal and interest. Typically, the taxes, CDD, HOA and insurance will amount to another $1,000/month or so. In this scenario, a family would save more then $10,000/year renting instead of buying. Since short term price appreciation of homes can not be expected in 2008, renting is simply the safer way to save.
Perhaps the biggest change from last year, however, has been the rapid increase of tenant prospects that are displaced homeowners that have been through a foreclosure, short sale or some other removal from a home they owned and simply could not afford. These tenants typically have poor credit scores from recent events and/or had bad credit but qualified for a home they could not afford due to loose mortgage standards. Dealing with tenant prospects that are moving because of failure to pay a housing payment in the past should be more of a concern for landlords. As the tenant prospect has already demonstrated poor judgment by purchasing a home they could not really afford, the landlord must be sure they are not once again making a poor judgment on renting a home they also can not afford. In many cases, these prospects are more concerned with the size they need, to match the home they are leaving, then the actual income they have to put toward housing. A landlord MUST be certain to make sure a tenant such as this can really afford to live in their home to avoid having to evict a tenant.
The rest of the tenant prospects should fit into one or more of these categories:
- Moving to the area, want to rent before buying and are real candidates to buy a home.
- Moving to area and need to rent before buying because their home is under construction. This is not as common in 2008 as it was in 2007, but it still does happen.
- Moving to the area and need to rent and are not necessarily potential buyers.
- Sold their home and need to rent for financial or other reasons.
- Don't like their current New Tampa rental home and want a better place to rent.
- Need a bigger rental unit then the one they currently reside in.
- Forced to move because Landlord sold or is planning to sell the home.
- USF Students that need housing in the area but away from campus.
- Separation and those in the middle of a divorce that need to stay locally.
- Credit issues limit some tenant prospects from being able to buy.
- Temporary transplants for a local job.
- Military transplants that are willing to commute. While MacDill is a bit of a drive for some, others are still drawn to the New Tampa community.
- Just prefer renting.
It will be important for the person responsible for finding and placing the tenant to know how to react to the needs of each tenant prospect. Remember, these are people looking for a place to call home, so any level of insecurity could cause them to go elsewhere. Many times the homeowners get to caught up in personal needs that they forget this simple fact.
New Tampa is still a market in transition and more agents are starting to look more closely at the rental market and providing tenant placement services to owners that could not sell their homes. However, being licensed and thus having the ability to charge a landlord to rent their house does not take the place of a properly trained professional that has a proven track record for finding a tenant. Beyond just identifying a tenant that is interested in a home, there are other aspects of placing a tenant that are critical to ensuring a successful landlord-tenant relationship. Make sure you only trust your investment to a professional property manager.
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