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Another way the sluggish housing market is changing the way we live - the rise of reluctant landlords, people who want to sell their homes to pursue a job or relationship, but find their pride and joy sitting on the market for weeks and months without a buyer in sight. So would-be sellers often move on. And instead of selling their homes, rent them, which means dealing with tenants. Sometimes that goes well and sometimes, not so much.
NPR's Cheryl Corley reports.
CHERYL CORLEY, BYLINE: So here's the tough talk that Realtors often tell homeowners these days.
FRANK MAGUIRE: This is the new reality. Our market is, you might sell your home or you might not.
CORLEY: So Chicago Realtor Frank Maguire says that means...
MAGUIRE: There's a whole world of people who are unintentional landlords.
CORLEY: Unintentional, accidental, reluctant, never-in-the-world-thought-I-would-be-a-landlord landlords. That's the fate of many a homebuyer trying to sell these days. Sometimes, it works out well. Maguire's next-door neighbor is a good example.
PAUL WILLIAMS: My name is Paul Williams. I live in Rogers Park. And I moved here due to a job change.
CORLEY: Williams, along with his wife and young daughters, rent a home on Chicago's far North Side. They also own a two-bedroom bungalow in Oakland, California, bought at the height of the housing boom.
WILLIAMS: We bought it at just over $500,000, and the last appraisal was at $260,000.
CORLEY: Ouch. Once they heard that appraisal, Williams says he and his wife decided not to sell but instead, to rent their home to a friend of a friend.
WILLIAMS: I'd owned rental property before and had almost a problem every month. And so was not very excited about the idea of becoming a landlord again. But we've been very fortunate to have a great tenant - knock on wood. Thus far, it's been very uneventful.
CORLEY: There has been a big jump in the number of single-family homes shifting into the rental market since the country's housing boom started to bust.
Eric Belsky, with Harvard's Joint Center for Housing Studies, says during the boom years - between 2001 to 2005 - about 700,000 single-family homes became rentals. The latest survey, tracking housing units from 2005 to 2009, showed a significant increase.
DR. ERIC BELSKY: Two point three million single-family homes flowed from having been owned to being rented. And they're not just being offered for rent, but they're actually occupied by renters.
CORLEY: In some areas, condominiums are the big market. Ron Abrams, with the Chicago Association of Realtors, says sellers still often test the market first, then put their condo up for sale in hopes of getting a good deal. And many end up renting their units.
RON ABRAMS: The good news for the owners, or the reluctant landlords, has been that the rental market has been so good that they've been able to cover pretty much all their expenses, and just been able to basically go on with their lives.
CORLEY: Of course, some condo associations don't allow rentals or have certain restrictions. And sometimes, it just doesn't turn out so rosy.
JEANETTE MASTERSON: My first time being a landlord turned into a nightmare.
CORLEY: Jeanette Masterson says if she knew then what she knows now, she may never have become a landlord.
MASTERSON: The only thing I knew was that if something was broken, I would have to fix it. I just assumed everyone would be a good renter. I approached it in a very naive fashion.
CORLEY: For about three years, Masterson lived in a two-bedroom condo that she bought for $173,000. After she married, she moved into her husband's larger condominium.
MASTERSON: Originally, my condo was on the market for eight or nine months; a lot of showings, no offers. After we weren't able to sell it, we decided to rent it out to bring in some income, to help cover the two mortgages that we now had together.
CORLEY: The rent covered Masterson's mortgage and assessments. The tenants paid all of the utilities. They called often for small things, and then wanted to break their lease. It turned into a legal quagmire, and a battle over the security deposit.
When the saga came to an end, Masterson tried again to sell her unit. It stayed empty for almost a year. A Realtor helped her find a property management firm, which rented the condo right away.
MASTERSON: We're losing about $600 a month.
CORLEY: But at this point, Masterson says, they're just trying to minimize their loss. And they're able to do it with a lot less stress.
MASTERSON: I'm not on pins and needles every day, wondering if I'm going to get a call about something stupid. Again, as a landlord, that's something I had to accept. But now, I don't have to worry about it, having a property management company working for us - managing my condo.
CORLEY: Masterson says her best advice to accidental or reluctant landlords: Be prepared - because it's not an easy job.
Cheryl Corley, NPR News, Chicago.
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