1 Avoid property management firms like the plague.
They seem to do nothing but cost both parties money for little service. I've done my best by renting from owners who love that I can snake my own drains, replace crown molding, replace a small subfloor section that's rotting, etc.
When renting from an owner, consider these things:
A.) Gauge the personality of your potential new landlord.
Are they now renting a home that they were trying to sell? I did this in Tarzana in 1990. The owners were flippers and pissed as hell at being on the wrong side of the housing bubble. The home wouldn't sell after they completed a bunch of upgrades and an addition using substandard materials. This evil little Jewish woman rented it to us and just made us miserable. She lived locally and her daughter lived right next door. She'd walk into the home without notice. She'd
sneak in so quiet I almost hit her with a baseball bat once. She harassed us the entire time. We left as soon as the lease was completed.
B.) What else can you bring to the table?
Are you willing to really take care of the place? Most individual landlords are terrified of renting to demanding, high maintenance tenants. So don't be that person - easy cheesy lemon squeezy. High-maintenance tenants need to rent high-end apartments or they will never be happy. On the other side of the spectrum, the amazing Mr. Gwynster and I have no fear of working on the home. We do draw the line at running gas lines and major structural issues. These are things
the landlords will need to deal with on their own.
If you can work out something regarding regular maintenance and perhaps doing some small sweat equity projects in return for small reduction in rent - I say go for it. You'll like the property more, the owners will like you more, and it's a great excuse for buying power tools!
2 Be prepared to demonstrate financial and personal stability.
Remember that individual landlords are afraid of scary tenants. After prices escalated here in the greater Sacramento area, the only people left to buy were sub-prime individuals and speculators. We now have the same situation with rentals, just without later. If you were one of the savvy folks who sat on the sidelines during the real estate madness here, Sacramento is now your rental oyster.
If possible, when setting down to draw up the rental agreement, walk in with recent copies of your credit reports, a reference list, etc. I even include my resume and hand it all off to the homeowner.
In short, don't waste anyone's time on a scenario that will never work. If you have bad credit, point it out and bring something else along to define why and how it is being corrected. Basically, treat it like an interview if you want a good deal.
3 Be prepared to love the place.
If you don't like it, don't rent it. Coming home to a place you hate sucks and you'll resent the resent the home and the landlord and it all goes downhill from there. In summer of 07, you will have so much to choice from so there is no pressure. We housing bears are nothing if not patient.
4 Be careful of renting a home now that the seller could not move before the bubble burst.
Imagine purchasing a home to flip using the last of your resources and finding yourself underwater and unable to sell. You'd be terrified too. Local landlords can be a pain if they are new to it and frantic about the property. The closer they are to loosing the property due to over-leveraging, the worse they will be.
If the potential landlords aren't local then you get some breathing room. Remember that you are renting a home to live in, not a mansion to maintain as a central valley shrine to their bad financial timing. Don't trash the property but don't be afraid if it either. And never rent a property while it's on the market to be sold. I insist that the home remain off the market while I am a tenant. If you get a bad feeling about the expectations, run, don't walk away from it.
On the other hand, the best landlord I ever had lived in Land Park. She was renting her old family fourplex downtown with no intention of selling for years. The place was a gem in the rough. She'd make me cookies every Christmas. I attended the funeral of her husband and cried along with her. We had a great relationship and I stayed there for 10 years until she had her daughter in law take over the management.
5 Do the math before you go shopping.
For us housing bears, this is such a no-brainer but I had to include it. Look at the neighborhood choices, look at what is being asked and then see what is actually being rented. I recently have seen a 3/2 and 4/3 renting for the same amount one street apart. Guess which one is still on the market 2 months later?
I had restricted my search to Davis and Woodland but these people are still drinking from the 2005 punch bowl. I'm now looking at Natomas and I'm amazed at the listings, all competing for those few people with the incomes, financial worthiness, and stability to be rent their 4/3 homes. So much is out there that you can actually watch them under bid themselves in real time.
There will be better deals in Natomas, Rocklin, Folsom, and Elk Grove long before you see them in the central city. Just make sure to keep #4 in mind because these areas will also see the worst of the downturn.
6 Advertise yourself
Think of finding anew place to rent like networking to find that next great job. I posted on Craigslist stating what I wanted and what I could offer. I've been blown away at the response. The downside is you also get a lot of offers you'd never consider (no I will not commit to a land lease on your Oakpark albatross). Just stick to your budget and don't budge.
7 Don't forget to save!
Don't spend more then 25% of your income on a rental. Bad things can and will happen to the best and smartest of us. Use this upcoming lull in rental prices to sock away money for that down-payment once prices come back down.
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