Currently, there are almost 90 million Americans that rent their homes.
And about a million more are expected to be added to that number this year alone. These will be previous homeowners that have sold their homes by short sale, or for less than the balance of their mortgages. And, there will be owners that have lost their homes to foreclosure.
So, what does this mean to the landlords?
Some rental houses will begin filling up.
But, what about landlords that rent to only people with perfect credit?
Will some landlords have to shift their thinking?
There will be previous homeowners joining the tenant ranks, but the ones that went into foreclosure and many who had to short sale their homes won't have perfect credit. In fact, their credit may possibly be destroyed.
So, what is a landlord to do? Perhaps, some will have to change their way of thinking.
As a landlord, I have no problem with renting to people with blemishes on their credit. Bad things 
sometimes happen to good people. I know many hard working people that pay their bills on time. Some people just get stretched too thin. I look at every individual's situation on a case by case basis.
I also know many owners that can pay their mortgage payment at $1000 a month, but as soon as it jumped to $1400 a month, they were no longer in a position to pay it.
So, in this ever changing real estate market, if landlords reposition their thinking, they'll soon be able to get their properties rented to good, hard working tenants that previously had hoped to own a slice of the American Dream.
If you're a landlord, are you rethinking your position in today's market?
that for you
Good points. I think a repositioning like this will help get us a better tenant!
I look at every person on a case to case basis and try to look at the big picture.
I think that every person should be viewed indivdually. Repositioning in this market will allow us to be in a win-win situation, both for landlords and tenants.
Hi Sandy,
Good post. I agree with everything you've said. Collier County (Naples FL) has 20% short sales this year in our MLS they are predicting 40% next year. And you are right. Where are those people going to go if they decide to stay in Florida. A United Van Lines Rep. came to our office yesterday to give us info on helping people move and of course, use him. He mentioned that of the 30 calls for appointments to move last month, 25 were to go out of the state of FL. Will they come back when construction picks up again, who knows but I agree that landlords to have think about how to handle the next wave of renters.
Konnie, Uh-oh, I suppose it happens to all of us at least once. But, 5 months for free? The law won't get them out? Oh no. We ask for first month rent and a much larger security deposit, depending on their credit. Some know the ins and outs of the law and how to beat the system. Best of luck to you.
Hi Lynn, Interesting that 25 of the 30 calls the van lines rep indicated were leaving the state of Florida. Did he say where they are going? Good questions...will they come back after construction picks up? I think for the ones that stay it will be a good opportunity for both landlords and tenants. Thanks for the great info!
Great points Sandy. I sat in on a conference today that talked about the jobless recovery we may have. If the economy grows while employment weakens, then landlords are going to have to shift their requirements.
Hi Joe, I agree, we are hearing the same things everywhere, that we will have to shift our thinking. Well, the only thing certain in the real estate market is change. Thanks for the comment and have a great weekend!
if the number of calls our office gets for rental property is any indicator, rentals are the hot housing topic of the near future, we are renting on average 3-5 homes a week and getting 10-12 applications a week. The down side of this economy is that there are a lot of tenants with bad credit, poor income, and not so good rental and employment histories.
Those leaving the sunshine state are mostly going to TN, GA and SC . A few out to the mid (cold) west.
Good question. I don't do property management and very few rentals. I will have to check with the person I do business with.
Harvey, We are getting alot of rental calls. also. However I agree with you completely, bad credit, poor income and poor rental employment history make a terrible combination. Those elements are tenant problems. We look for people that have good solid job history, in addition to a good solid rental history (prior to their foreclosure). For me I usually have a three strike rule. Three red flags on a rental application and I pass, and move on to the next tenant.
Lynn, I have heard the same thing, that people leaving Florida are going to the Carolinas, Alabama, Georgia and especially Tennessee.
Gene, See what you find out. See if you are seeing more applications coming in for previous owners that have lost their homes to short sale or foreclosure.
As a real estate professional that has worked specifically in rentals in the south Florida area I have seen many cycles in the market. Obviously the current cycle is creating so many potential renters with blemished credit. I agree with your post that landlords need to maintain an open mind when reviewing a potential renter's credit, employment and income verification/history. Every single offer should be reviewed on a case-by-case basis. As there are some prospective renters may have experienced an abnormally challenging situation, which affected their normally satisfactory credit. However, it is also imperative that landlords do not revert to the opposite extreme, due to their desperation to retain rental income, and accept all prospects' explanations without requiring backup verification. I have seen many instances of prospective renters that offer extremely believable excuses and reasoning, but upon closer examination I have found that they were not being honest. Landlords need to take note of the lessons the mortgage industry is currently suffering, which is a product of their reduction of guidelines in the past, to insure the same situation in the rental market does not occur. Protect your assets by reviewing each case and ask for backup to validate the explanation.
Hi Andrea, Points well taken. I agree that we must not revert to the opposite extremes in choosing prospective tenants with deplorable situations. As you have, I have found not everyone is honest in presenting their situation to a landlord. Thank you for your words of caution and your warnings to landlords.