Tips on Moving from a Foreclosure to a Rental

June 21, 2009 at 2:43 pm Leave a comment

The rental market in greater Phoenix is fast becoming a refuge for homeowners whose houses were recently foreclosed on or sold on a short sale.

The most common question asked by displaced homeowners is, “Will I be able to rent a home if I have bad credit from a foreclosure or short sale?” The answer is “maybe,” depending on the location, landlord’s flexibility, the amount of your down payment, your income and your rental history or credit history.

1. Location – Areas that have a high foreclosure rate usually tend to be more accommodating to homeowners who have bad credit due to a foreclosure or short sale. Examples are: Phoenix, Laveen, Maricopa, Queen Creek, El Mirage, Mesa and Surprise.

2. Landlord’s Flexibility – Some landlords have stricter guidelines than others regarding what they would consider a good renter. Some ban smokers or pets, while others don’t mind.

3. Down Payment – If you are considering renting a home due to an imminent short sale or foreclosure, it is a good idea to build your reserves for a large down payment. It is possible that the landlord or property management company will ask for six months’ rent in advance to manage the risk that you may default on your monthly rent.

4. Income –
You should be prepared to prove that your income is sufficient to pay the rent.

5. Rental History and Credit History
– Many times the property management company will need more information to explain why your credit rating is low and will want to verify whether you are a good renter and person. This can be done by calling your previous landlord, talking to references and verifying any eviction or judgment liens against you.

The key to recovering from a short sale or foreclosure of your home is planning and preparation. If you need more information or are considering a short sale of your home, feel free to contact me or another qualified Realtor for help.

Entry filed under: Arizona Real Estate, Chandler Real Estate, Phoenix Real Estate, Real Estate Deals. Tags: , .


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