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Renting your home carries risks

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While this can cut into the owner's profit -- or increase the owner's debt if the rent isn't high enough to cover the owner's costs -- it can provide peace of mind, Grimes says.

"For absentee owners, there's a difference between handling a rental and having boots on the ground," Grimes says.

To preserve value and make sure the front lawn stays sales-ready, homeowners often need someone willing to thoroughly examine the home inside and out.

While neighbors, friends and family may be able to do quick spot-checks, they won't be as invested as someone paid to do so.

And some property management companies are headed by real estate agents, so they can do double-duty when it's time to sell.

Of course, not all property management companies provide high-quality services.

Before choosing a property management company, it's important to ask the right questions. Mark Heppard, president of Mutual Property Management in Farmington, Mich., suggests the following questions.

14 questions to ask a property manager
1. Do you work with the owners of single-family homes or condos? Can you provide references?
2. How do you communicate long-distance (e.g., e-mail, phone, letter) and on which topics?
3. Can I see a sample service agreement, outlining the services provided?
4. Do you handle property staging for rental?
5. How will you advertise my property (e.g., newspaper, Internet)?
6. How do you screen tenants and handle viewings?
7. Do you provide a trust account for security deposits?
8. How do you handle routine maintenance issues? Are your contractors licensed?
9. If a property emergency arises, what procedures are in place to respond quickly?
10. Who drafts and executes the lease documents?
11. What's the procedure to deal with late payments and handle the eviction process?
12. Do your services comply with government regulations?
13. How do you report monthly and year-end accounting?
14. If I decide to sell, do you offer additional services?

"Consider the reputation, accreditations, fees and testimonials of current clients," Heppard says. "If financially doable, the right property management company can save you a tremendous amount of effort, money and heartache."

Best of both worlds?
Sharon Simms, a real estate agent in St. Petersburg, Fla., knows that today's economic environment is tough on those who wish to sell.

So, she offers a potential solution to her clients -- she can place properties on the market for sale and for lease.

"In the MLS listings, we state that the property is listed as both and that the owner will do whichever produces a successful contract first," Simms says.

A lease can either state a fixed purchase price or leave the price open to a future agreement between parties, Simms says. However, a fixed purchase price won't entice many buyers until prices start rising again, as today's homes cost less than last year's.

And even the best agent can't change economic realities, especially for owners who are "upside down" -- meaning they owe more on their house than it's actually worth.

"In most cases, especially if the owner bought the house in 2005 or 2006, they will be losing money on either the sale or the rental," Simms says.'s corrections policy -- Posted: Sept. 29, 2008
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