My Rental: A Story of My Search To Find a Rental Home
Let me tell you a story. A real estate story. Seven years ago, my wife and I decided it was time to move from Belltown — near the urban core of Seattle — to the suburbs. We had lived near Pike Place Market for a few years, and greatly enjoyed Belltown’s restaurants and bars. But the urban jungle had grown old, and it was time to swap our neighbors: from young, hip singles and couples to soccer moms. We had never bought property before, and like most first-time homebuyers we were intimidated by the process. Having rented in Boston, New York, LA, San Francisco, and Seattle, we qualified as serial renters. We even leased our cars; buying was a whole other matter. So I naively started looking for a rental that met our needs. This was 2003, a few years before Zillow came on the scene. Seattle rentals were hard to find, especially ones that we liked.
After surveying many neighborhoods, we gravitated toward Madison Park. We loved its relative serenity, its proximity to downtown Seattle and the Arboretum, its easy access to Bellevue and the Eastside, and its sense of community. Unfortunately there was hardly anything to rent in Madison Park, so we started going to open houses of homes for sale. One day we hit the jackpot: a seller who was relocating to Asia and had been trying to sell his home for almost a year. We made an unsolicited offer to rent, and in a few weeks we were packing up our Belltown apartment and moving to our new rental in the ‘burbs.
Two years later, with a baby on the way and mortgage rates at historic lows, we emailed our landlord in Singapore and offered to buy our rental. Buying a house without having to pack boxes is a beautiful thing.
Me? A Landlord?
Which brings us to 2010. Having outgrown that house, we were ready to move on. As a student of the housing market, I knew that real estate analyses by Zillow’s Chief Economist Stan Humphries showed that this was a buyer’s market, but I didn’t relish the idea of selling during a declining market. Many real estate agent friends asked me, “why not?” After all, if I was trading up to a more expensive house, then selling and buying makes a lot of sense in a down market. But I had a huge psychological barrier which I was unable to overcome: I could not bring myself to sell my house – my beloved house – for less than I felt it deserved. So, unwilling to part with my house for what Dr. Stan’s dang Zestimate said it was worth, and unable to buy another house without first selling my house, I decided to become a landlord. I would join the massive amount of people waiting on the sidelines for that precious moment when home values in my neighborhood stabilized; I was now a statistic in the group we housing pundits call “pent-up supply” — people who are anxious to sell, but unwilling to accept today’s market reality. Rentals, here I come.
First, I took advantage of the extremely low mortgage rates in Fall 2009 and refinanced my mortgage through Zillow Mortgage Marketplace. I lowered my monthly payment dramatically. [Insider tip: you can’t refi if your home isn’t owner-occupied, so I was sure to complete my refi before I rented it out.] Next, I posted our home for rent on Zillow ($9.95) and Craigslist (free). Determining the appropriate rental asking price was extremely difficult – where’s a “Rentimate” when you need it? I did my best to look at other rental asking prices to determine comps, and I played around with what someone’s mortgage payments would look like if they bought my house, but at the end of the day it was really just a blend of my guess of what the rental market would bear, plus an amount slightly higher than my mortgage payment so I could make some money on my house.
Craigslist surfaced one serious candidate, and Zillow (to my great pleasure) surfaced two. Ultimately we rented our house to a fantastic couple at our full asking price, and yes — they found my home on Zillow.
Pressure is on
Then panic set in. We had signed a two-year lease for our house to tenants who expect to purchase my home during their lease (much as we had done when we first rented and then purchased the house several years ago). But we had only a few weeks to find a suitable rental for us.
All of the sudden our search went from casual to semi-desperate. And again, as I had done seven years earlier, I started scouting homes that were offered for sale in order to supplement the available rental inventory. This tactic brought me into contact with dozens of listing agents in Seattle and Bellevue. These interactions were fascinating and educational. Most of the listing agents to whom I reached out, inquiring whether their listing might be available for rent, never even responded to me. I realized that they have been hired to sell (not to lease) a home, and I realized that their compensation is structured in such a way in which renting their listing is far from ideal. But, I was still surprised by how many agents blew me off. A small number were at least courteous enough to respond to me, explaining that their seller wasn’t interested in renting.
Fortunately, a very small number of them were smart enough to try to turn me into a client, either now or down the road. They deserve special mention: Patrick Beringer, Kathryn Lister, Judie O’ Brien, Lis Brown, Angela Hardy, Deidre Doyle, Pat Patt, Karl Lindor, Shawna Ader, Holley Ring, Hedy Joyce, Scott Richards, Randy Ginn, Tim O’Brien, Hal Rappaport, John Kritsonis, and Tracy Smith. These agents were smart enough to gain my acquaintance, to ask if they could send me for-sale listings just in case I changed my mind and wanted to buy, to offer to show me listings, to put me on their email lists, to promise to check in with me in a year once my rental lease was up, etc. Kudos to them for trying to turn lemons into lemonade, and one of them will probably gain my business based on this experience.
Ultimately, we ended up renting a plain old rental, rather than a “for sale” home which became a rental out of desperation. We’ve just moved to View Ridge this month, and we’re very excited. We’re literally and figuratively further away from the bars and nightlife of Belltown than we ever have been. And I’m OK with that.