Many of you may be looking at this article's title with some amount of doubt. The unprotected minorities series has thus far focused for the most part on renters who are at a disadvantage due to their unique traits - pet owners, overweight individuals, night owls, introverts. By contrast, former owners are actually in a great position when it comes to getting approved for apartments. After all, if a mortgage lender has already vetted someone, chances are they will pass any apartment community's criteria for income and behavior with flying colors. However, they are still a minority that is frequently overlooked in marketing of rental housing, and they definitely have certain quirks and concerns that can make the return to renting a challenge.
The well-worn trope of the "American dream" would have us believe that home ownership is the main goal, and that those who buy a house will never go back to renting. The reality is far different. According to the most recent American Housing Survey run by the US Census Bureau in 2013, 23.4% of those who moved to renter-occupied housing within the past year in the Chicago metro area came from owner-occupied housing. However, only 10.5% of those who made the shift back to renting from owning cited "change from owner to renter" as their primary reason for making the move.
Off the top of my head I can think of a lot of reasons why a homeowner might become a renter again. Temporary job changes and divorce both come to mind. Seniors who can no longer handle maintenance of their homes might consider moving to a setting where a landlord handles such chores. In addition those who are looking for themselves, there are also homeowner parents who are assisting their children with an apartment search. No matter the reason, returning to the rental market after years of homeowner life takes some adjustment. We're here to help you structure your search by pointing out common pitfalls faced by owners turned renters, and by providing some workarounds.
Be Ready for Sticker Shock
One of the main reasons put forward by advocates of homeownership is the concept of rising value paired with static costs. Your house gains value over time provided you keep it in good condition. However, your ownership costs stay mostly as they were on the day you moved in. This is not the case in rentals. While you were living in your house and comfortable with your consistent monthly payments, the cost of renting increased year over year to reflect actual market values. Suppose that you rented an apartment in a relatively stable neighborhood (e.g., not Logan Square) for $900 before you bought your house ten years ago. If rents increased 5% per year, a not unreasonable figure, that same apartment would now be worth nearly $1400.
Those who are looking for housing at way below market value are at highest risk for getting scammed. Scammers attract their marks by advertising apartments they do not own at "too good to be true" prices, then taking security deposits and giving nothing in return.
The most important thing you can do when returning to the rental market after a long absence is to take some time and reacquaint yourself to what has occurred price wise before you start scheduling appointments. If you returned to any other hobby or job after several years away, you would probably need some time to brush the rust off of your skills. Apartment hunting is no different. Learn what different price points get you in different neighborhoods before committing yourself to a budget.
Keep Your Search Short
If you've bought housing before you probably went through a lengthy housing search. It may have taken you weeks or months to find something you like. You nitpicked over tiny details with the mindset that you were making a long term commitment. You may have had to wait over a month to go from contract to closing while lenders and appraisers did their thing. This is not the case for renting.
When I worked as a real estate agent it was in the period right after the housing crash. There were a lot of distressed homeowners in foreclosure or short sale situations who were forced back into renting until their credit recovered. They always took the longest and were the most picky in their rental searches, applying their owners' eye to rentals we would view together.
Homeowners returning to the renting scene are much like widows or widowers returning to the dating scene. You're not what the market has in mind, but your experience makes you an asset. You're old school folks in a Tinder world. Your last experience involved questions like, "do I want to raise a family here?" but now you need to be able to make a quick "swipe left or swipe right" choice with little personal investment.
The first thing I would do with owners-turned-renters was to sit down with them and have them list their wants and needs. I would then ask them to cut 9 out of 10 items from those lists. Next, I would let them know that we would go out on no more than two tours and choose from what we saw on those tours. Choosing an apartment is about deciding between the best options available today, not the options that might possibly become available next month.
Homeownership is a Lifestyle, Landlording is a Business
As an owner, you had full control over your domain. You controlled who could enter and leave your property. You decided which companies came in to fix broken things. You determined how clean was "clean enough" and how quickly a broken item should be repaired. You had the luxury of applying your personal preferences and priorities to the upkeep of your housing.
You may also have been very emotionally invested in your home purchase, especially if it was your first one. You chose a house that you absolutely loved, no holds barred.
If this describes you, you need to prepare yourself for returning to commercial real estate.
Landlords and property managers tend to run their buildings as businesses with an eye on costs and investment value, and little to no emotional connection to their portfolio. As someone coming from an ownership situation you may see this as a bad thing, but really it's the sign of a good landlord with solid properties that will probably stay in business for a long time.
You should absolutely find something to love about your new rental housing. Do what you can to make it your own, within the confines of your lease agreement. But do not expect your landlord to have the same love for it that you do. You will need to let go of the control you had over your home.
The term "alienate" has taken on a very negative meaning in recent usage. It's conventionally used to indicate hostility or isolation. I do not mean it in this sense, but in the way that Bertolt Brecht used it, the concept of making something familiar seem strange in order to provoke thought and growth.
Instead of viewing your return to renting as a downgrade, use this short term, disposable housing experience as a way to introduce yourself to something entirely new with a hint of the familiar. Shock your own senses. Choose a completely different style of housing or try a neighborhood with a radically different profile than your current one. This is your chance to learn how other people experience the world.
By distancing yourself from the familiar cues that signify "home" to you, you will in effect prevent yourself from drawing direct negative comparisons between your new housing situation and the old one.
Demographics Do/Don't Matter
Of course, for those of you moving to rentals with spouses and children you may not have the luxury of plunking yourself down in any old rental. Many of those who buy housing do so with a strong eye towards schools and safety. For those of you moving with kids you will still need to put these priorities first. Unfortunately, in Chicago choosing a neighborhood with the best schools may also mean choosing a neighborhood with very few affordable rentals.
I said above that I would ask renters to cut their lists of wants and needs by a large amount. I would repeat the same thing for neighborhood choices. Rentals tend to cluster in areas frequented by young people and lower income families. This may be uncomfortable if you're coming from a low density residential area. When choosing a neighborhood you need to focus on only the top one or two "must haves" and discard the rest of your criteria. If those "must haves" are schools and safety, you may need to ignore other issues like the racial breakdown, average age or name recognition of the area.
The Internet is a Thing Now
If you've been gone from the housing market for even 2-3 years chances are the real estate industry's use of the internet has moved far, far ahead of where it was the last time you were in it. As soon as you start searching for things related to moving and apartments, rest assured that Facebook, Google and Twitter will all start blasting you with moving-related ads.
There are a lot of tools and services out there on the web to help apartment hunters. (We're one of them!) Some are fantastic. Others are less than reliable. Due to gaming of search engines, the top results in your searches may not be the most useful ones.
The most reliable way to find out the best online sources for rentals in your area is to find out where the most respectable real estate brokerages in town are marketing their rental listings. I mean established companies that work with both rentals and sales. It may be tricky to get an answer about this out of a local agent without getting tied into using that agent's services, but it will be worth it in the long run if you can find out.
Also bear in mind that the modern rental industry of 2017 expects apartment hunters to be using smartphones as integral tools in their searches. I would strongly caution you against overloading yourself with apartment hunting apps, as learning how to fully use each one may distract you from the real task at hand. Choose a toolset that is lightweight and makes things easier rather than adding another layer of tap and click busywork.
Explain Things to Your Kids
Moving back to renting from homeownership is probably going to put you through some culture shock. For your kids it could be even more drastic, especially if they have lived in the same house for their entire lives. Moving anywhere is tough for kids. If your child has only been exposed to the concept of renting through the way it is portrayed in TV shows and movies, it may be a scary prospect to them.
Take some time to explain the facts of renting and owning to your kids as you go through the process. Let them know that this move does not mean you have lost all of your money. Let them know that not all landlords have long twirling mustaches and black capes, nor do they all look like the President. Your kids may face ridicule and bullying from their old friends or from new peers in their new neighborhoods when others find out that they live in an apartment - give some thought beforehand to how you will deal with this.
Have you made the transition back to renting from owning? Why did you do it? What was the process like for you? Let us know in the comments!
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