Mortgage rates have upended the real estate market. Many would-be homeowners do not want to lock into a 30-year mortgage with rates as high as 8%.
First-time homebuyers do not have an existing asset to leverage. For them, renting a home is the only option. Current homeowners would rather sit tight and enjoy the cheap financing behind their sub-4% mortgage.
In fact, more than 82% of homeowners have a mortgage rate below 5%. Nearly one-quarter of all homeowners have a sub-3% rate.
These households would rather become landlords than give up this rate. Read on to learn about the rise in accidental landlords in Springfield, MO. Explore current housing conditions and how they are impacting the rental market.
Current Housing Conditions
The reluctance of homeowners to give up their low interest rate is impacting supply and demand. Inventory is down as fewer homeowners list their homes for sale.
Lower supply places upward pressure on home prices. Sellers have multiple suitors and can still control the price point. Homes can sell quickly in these conditions.
Some homeowners decide to hold the rate and rent out the house instead. Here, homeowners can take advantage of surging rents in Springfield. From August 2021 to August 2022, Springfield rents increased by more than 123%.
The average rent is now north of $1,600 per month. Landlords build high rates into their rent. With low-rate fixed mortgages, you can turn these higher rents into a higher profit margin.
Property Management Services
If you have become an accidental landlord, you may not know how to manage a rental property. If this is the case, hiring a property management company may be the solution.
Few landlords have the qualifications to perform repairs and general home maintenance. As a landlord, it is your responsibility to promptly inspect and repair broken appliances and other major home issues.
A property manager is better suited to handle these problems. Many have experience making repairs. Others have built a robust network of contractors to handle preventative and corrective maintenance.
Property managers can also help you avoid uncomfortable situations. As an accidental landlord, you may not have experience collecting past-due rent. In the worst cases, you may have to evict a tenant for breaking the rental agreement's terms and conditions.
Using a property management company can shield you from these situations. They are knowledgeable about Missouri eviction laws. This way, you can ensure the proper procedures and policies are followed.
The best property management companies can also help you in other ways. Tenant screening and property marketing are two examples of provided services.
Your Guide to Accidental Landlords and How to Become One
One of the best decisions that an accidental landlord can make is hiring a property management company. This may be new territory for you and a property manager can guide you through this process.
Hunter Property Management has been guiding new rental property owners for more than 3 decades. If you recently found yourself among a group of accidental landlords, contact us at Hunter Property Management to speak with a professional today.
