Leasing a home advice

[bokelley]

Brandi, we had friends here in MI whose landlord was not paying the mortgage and they had to move very quickly when it was foreclosed.

See that is why I was so worried. With all the forecloses is just seems possible. I figure if they want a credit report from me, then I should be able to get some sort of security for me. If they don't like it then they might have something to hide.

[DCJenn]

I absolutely run a credit check on each person that will be renting. I do it as a part of the application process. DC has very strict Tenant Friendly rules that make it nearly impossible to kick someone out of your house. It's crucial to have whatever information you can on your renters. Generally, if a tenant stops paying rent in DC in January, it can take until October to finally kick them out. Yay.

Jenn

[SoonerTexan]

Regarding the credit check (we used Craigslist to find our home) we ordered the credit check, since you have to have ss#, then sent on the information to them, that way you can mark out all your important info that they do not need.

I like this idea. I was just wary of the people who wouldn't even give me any info until I gave them my credit info.

[reciprocity]

I'm sure he'd love to speak to Jenn Patel and I about the joys of owning two homes when the residency home doesn't sell. Most of the time it works out but when it doesn't it is excruciatingly financially painful. There's a lot of stuff we don't do because we have two homes to manage. (like vacations, etc.)

Jenn

Ugh, this is my nightmare. We've been back and forth about buying in Chicago while she's in med school - we've rented the past four years, but our most recent apartment revealed itself to be a winter nightmare, so I think we're going to move again, and I'm leaning toward buying even if it is only for four years. It's probably the wrong move though...

[DCJenn]

Honestly, the only thing I can impart about buying vs. renting is that real estate like politics is all local. Ignore everything you read about national trends and numbers of sales, etc. because if a house sells in DC in three months and in Chicago it takes 10 months, you have your answer. In the neighborhood in DC, houses are still only lasting 3 months (at the most) on the market but the prices haven't come back as much yet. (if they ever do, and hopefully they don't go back to the true levels of insanity that was the height of the bubble)

If you're interested in buying, look around, find some neighborhoods that you're interested in and contact a Realtor. Ask them for the comps and there are three things to examine- 1) how MANY homes have sold in the neighborhood over the last year, 2) what were the prices of those that sold and 3) what are the prices now and 4) how long are the houses staying on the market. One little trick that realtors do to make it seem like the houses haven't been on the market as long is that when their contracts expire after six months or so, they pull the house off the MLS and essentially relist it a few days or weeks later so it looks like it's a new listing.

Jenn

Except that there are four things- I was drinking that first cup o' joe as I was typing!

[Chrisada]

Well we are going to buy. I'm hesitant, but it is a great area. Grosse Pointe, MI. The prices are unbelievable in absolutely amazing neighborhoods. We would be saving several hundred a month by buying, since it is more expensive to rent in that area and my mom is giving us an interest free loan for a down payment.

[Chrisada]

Jenn, I'm taking notes!

I know that Grosse Point is a great area, and I'm sure the housing prices are at an all time, low ... but I'd be really, really careful about buying anything in a suburb of Detroit (right?) if you're planning to do a fellowship and/or planning not to stay there long term. Cleveland and Detroit are very, very similar -- I'd venture to say that Detroit is even more depressed than Cleveland right now. I've never been to Grosse Point, but I'd assume it's similar to Cleveland Heights / Shaker Heights. CH has some truly gorgeous, affluent areas, and then some real downers. We were in a mid-priced area of CH and it literally took us a full year to sell our home in Cleveland Heights while living here in KC. Paying the mortgage, keeping insurance going (which was a regular argument w/the insurance company b/c they don't like to insure empty homes). Grosse Point may have bottomed out price-wise, but that doesn't mean you'll be able to sell it in 4 years.

We bought a fully remodeled home in 2000, did additional work (bathroom remodel/added air conditioning, added a brick patio), made all of our payments, never refinanced, and *still* had to shell out $2K at closing in 2006, this after paying $1100/month for an empty house for a year, plus utilities, lawn maintenance, etc.

Just be careful. It doesn't mean that people shouldn't buy, and I really understand wanting to take advantage of the low home prices right now ... but I have PTSD about selling that house, and even though we're OBVIOUSLY in a much better position now and there are things that make me want to move, I cannot bring myself to pull the trigger.

[Chrisada]

Well Detroit is probably the most depressed housing market in the entire country. But Grosse Pointe is very unique in that it almost has a magic bubble around it. There are Detroit burbs like Harper Woods and St. Clair that we would not buy in. But the area of Grosse Pointe has not declined at all. There are more houses for sell, but the neighborhoods are still beautiful. The only reason I do feel comfortable buying there is because I have spoken to people like my father who have lived their whole lives there and have rental property. I do believe that we will be able to sell in four years. And even if we sell for less that what we paid, we would still be coming out way ahead. We are pretty much in the boat of pay $1200 a month for rent or pay $600 a month for a mortgage, bec. rent is still high in that area.

[MarissaNicole]

Well we are going to buy. I'm hesitant, but it is a great area. Grosse Pointe, MI. The prices are unbelievable in absolutely amazing neighborhoods. We would be saving several hundred a month by buying, since it is more expensive to rent in that area and my mom is giving us an interest free loan for a down payment.

How long are you going to be there? Reselling may not be an issue if you are going to be there a while. We are thinking of buying because we will be at our next location for at least 7 years because DH has such a long residency. Although if we don't find something we really like we will rent for a few months because we don't want to be rushed into buying because of our circumstances.

ETA: Ooops just cross posted with you! Looks like people who cannot sell their house are trying to profit from renting, which really surprises me because most people have to rent at a loss... but perhaps that is why those properties are available for rent.

If you're able to secure a mortgage for $600/month, that would be great (and would definitely make me buy), but really, really surprising. Also, keep in mind that along with a house comes all the stuff that breaks, and there's no more super or owner to pay to fix it (or deal with fixing it). You also have to buy all sorts of stuff you never needed in a rental: mower, shovels, hoses, etc. Still that would be made up in the difference of the mortgage payment you're talking about, but I've never, ever heard of one that low! Our house in Cleveland Heights cost $120K, and our mortgage (remember, property tax gets figured in on top of your loan payment) was $1100. We lived in the area with the highest property tax in all of Cuyahoga County though, so your situation may be better.

Good luck to you!

[MarissaNicole]

Yes don't forget property taxes, homeowners insurance, water, garbage, heat/air, electric and cable! I'm trying to figure the numbers myself right now (we currently have a lot of these things included in our apartment rent so its going to be a hit for me to add them all up!)

[poky]

What Jenn said. Factor in property tax, PMI if you don't have a large down payment, HOA fees if there are any, and maintenance of the plumbing, electric, appliances, etc, and the difference between renting and buying may not be nearly as big as you're thinking it is...

[NYCHoosier]

Just wanted to poke in to say that I love Grosse Pointe and am super jealous.

Okay, not that jealous b/c I don't want to live that far North, but GP is pretty freakin' sweet...if you have to be in Michigan.

Good luck, all!!

Love,
The eternal renter

We just rented our house in Canton. It went really smooth. Look on Craigslist. You'll find lots of listings in the area. Make sure the lease is good and covers everything that's important to you. Should go smooth!

Good Luck!
Lacy