Should You Rent Your Home When You are in Financial Distress?

Moon Ridge Property Management works with incredible property owners in Central Maryland. Here are some responses from another Q&A session. Today we deep dive into renting your property out when you may be struggling financially.

1. What made you decide to rent out your property as opposed to selling?

We were underwater on our mortgage. Selling our house meant taking a significant loss and damaging our credit. We really wanted to move without hurting our financial wellness, so we decided to rent.

Our Response – Sometimes, considering the circumstances, that may be the right and a wise decision, even if it is difficult. Most people think selling is the only option when you run into mortgage troubles.

What they fail to realize is that not only do you lose out your house, but you now have nothing to show for your years of owning that property. Settling the mortgage dues with interest leaves your pocket empty. Besides this, the sale will affect your credit rating as a paid mortgage will remain on your credit history for 10 years. The next time you apply for a loan, you might face difficulty in getting one because of a poor credit rating. 

To avoid all this, consider renting out your home to pay off the mortgage or catch up on missed payments. In this situation, your credit score will improve as it appears as a positive payment.

Rent out your home by enlisting an experienced property management company. At Moon Ridge Property Management, we know how difficult it is to pay off the mortgage or sell your hard-earned home. That is why we try to find the best tenant for you who stay on for years and bring you income.

2. What was your biggest worry/concern before renting out your property? How did Moon Ridge put that worry to ease?

Collecting rent every month was my biggest concern. How do I collect? What if they don’t pay? First, Moon Ridge put my mind at ease by explaining their thorough tenant vetting process. They wanted a high-quality, financially stable tenant just as much as me, if not more! Second, Moon Ridge detailed the process for dealing with missed rent payments. The interest on late rent, rent court process, and eviction process. It was crystal clear. Moon Ridge had the property owner’s worst nightmare covered from beginning to end. Lastly, they reassured me, the last thing Moon Ridge wants is a delinquent tenant. Sure, the process is solid, but more importantly, they would use a time tested vetting process to find quality tenants.

Our Response – Rent collection can be a pain if you have a troublesome or tardy tenant. Moon Ridge helps you handle these missed rent payments. To begin with, you must maintain a record of all the rents collected month-wise with the date. Next, it is always wise to send a reminder to your tenant for the monthly rent by mail. This records your constant communication with them in the case of any rental dispute. Lastly, you must issue missed-rent alerts to the tenant and encourage them to pay online. These alerts are proof of your constant follow-up with the tenant for rent and their failure to pay them.

If a tenant continues to avoid paying the rent, you must issue a 30-day notice for them to vacate. You ask them to pay the rent and leave. If the notice period expires and the tenant has still not paid the rent, you must file an eviction complaint and send its notice to the tenant. This notice will ask the tenant to leave after paying the rent and damages. Moon Ridge is your property management partner. So, we are here to guide you in every step of the eviction process.

3. How has Moon Ridge helped you manage the daily ins and outs of maintaining your property?

I have given them full control to maintain my property with a threshold. They schedule a maintenance service and bill my account. I am notified when maintenance is scheduled and completes. Moon Ridge has a preventative maintenance schedule. Funny thing is, I usually perform the same preventative maintenance in my own residence when I’m notified about the rental. They collect the rent. Work with the HOA. I probably missed something, but that’s the point, to be quite honest, I often forget I own a rental.

Our Response – We’re glad we could really put your mind at ease!

4. What do you get to do now with your free time since you don’t have to worry about managing your property? 

I know a number of people with rental properties. They all try it on their own. Every time I hear their stories, I’m grateful I picked Moon Ridge to manage the headaches. They think they are saving money. In reality, the missed rent due to delinquency and vacancy makes it close to a wash. Plus, I have the benefit of being stress-free!

Our Response – Thank you! At Moon Ridge, we try our best to find you a tenant who pays on time. Finding tenants may seem easy but we don’t just accept the first ones that come along. Our vetting process includes: thorough credit and financial checks, inspecting their current property to make sure it is respected and maintained, and sometimes even background checks and private investigators. We track their previous rental history to verify their authenticity. 

We tell them beforehand the guidelines for paying the rent. We inform them of the consequences of delaying or missing the rent payment. We make sure that the tenant has no intention of missing the rent due to neglect.

Regarding the vacancy of your property, in the current housing climate due to COVID-19, our ‘vacant’ or newly listed homes are occupied within 3-5 days on the market! As your property management partner, we try to get the best tenant for you within 15 days, but we’ll take this current surge.

5. What has been your overall experience with Moon Ridge?

Moon Ridge is exceptional. My mortgage situation drove me to rent out my home in the first place. Now, my experience with Moon Ridge is driving me to consider another rental property. And maybe another!

Our Response – That is fabulous news! We are thrilled that we were able to help you with your mortgage and financial situation by renting out your home. 

Dealing with different property types, we are aware of what every landlord expects. That is why we offer property management as a complete package. It includes tenant selection and screening, rent collection, and even home maintenance. 

Our clients are completely satisfied with our services and this is our true reward. 

Most of our new clients have come to us through referrals. Many of them have made us their family’s property management partner!

With Moon Ridge Property Management, you can stay worry-free but never rent-free. Buy properties and allow us to rent them out for you. Stay secure with your rental savings from your lovely homes always.

So, go ahead and buy another home and entrust it to us for rentals management.