5 Steps to Rent Your Home Fast in Salt Lake City: What to Do When You Need to Hold Off on Selling
So, your house didn't sell this summer, and now you've got two options you don't love. You can drop the price to a number that feels like a loss, or you can keep carrying a house you were counting on being done with by now.
There's a third option. You can rent it out for a year, let the market come back to you, and list it again in the spring when you aren't negotiating against your own mortgage payment.
I'll be upfront with you. This one earns me nothing this year. I'd still rather you make the right call than a fast one.
Let's walk through how to actually do it.
Step 1: Make the short list of repairs, and leave the rest alone
Here's some good news. You already did most of this. The house got prepped to sell this summer, and you have the listing photos to prove it, so use those same photos to rent it.
What a rental needs on top of that is a short list. Make sure the smoke and carbon monoxide detectors work. Get the furnace serviced before winter and check the age of the water heater, so you aren’t facing an expensive repair over the winter. Rekey the locks. And be sure the house has a fridge and a washer and dryer. Most renters here will expect them.
Then take out the few things you'd hate to lose. The light fixture you love, anything sentimental, anything you were planning to replace before you list next spring anyway.
Leave everything else exactly as it is. Rental upgrades don't pay you back at closing. Leave the house alone and it's still listing ready next spring.
Step 2: Hire a property management company
Here's the part that makes this whole plan work. You are not going to manage this yourself.
If you haven’t done this before, learning to be a landlord for one year is not worth it. Tenant screening in particular is where fair housing mistakes happen. It’s easy to get yourself in hot water legally and those mistakes can be very expensive.
A property management company in this market generally runs somewhere around eight to ten percent of monthly rent, plus a leasing fee when they place a tenant. On a house renting at $2,400, that's roughly $200 to $240 a month. For that, they handle:
Marketing the house and showing it
Screening applicants against consistent written criteria
Writing and signing the lease
Collecting rent, and chasing it when it's late
Taking the maintenance calls, including the ones at 11pm
Inspections to ensure your home stays in excellent condition
Some cities require a business license to rent your home. Make sure to ask your property manager if your city does and how you need to go about getting one. Usually it’s just a form and a small fee you need to submit to the city.
When you're interviewing companies and do interview a few, ask what percentage they charge, what the leasing fee is, how they screen applicants, and how fast they typically fill a vacancy. Then tell them up front that you're selling this house in the spring, because that changes how they write the lease. More on that in Step 4.
If you need a direction, let’s chat, I can tell you some property managers that are good and some to stay away from!
Step 3: Know what your house should rent for before they tell you
Even with a management company doing the work, you should walk in knowing roughly what your house should rent for.
For context, the average Salt Lake City apartment rents for about $1,602 right now, and three bedrooms average around $2,132. Single family homes generally run higher than that, and rents across the city have been roughly flat over the past year.
The mistake to watch for is the same one that made your house sit. If your home would rent at $2,400 and it goes up at $2,600, it can sit empty for six weeks while you find out that it won't. Those six weeks cost you around $3,600, and the extra $200 a month would have taken you a year and a half to earn back.
Ask your manager to show you what comparable homes actually rented for in the last 60 days and have them help you price accordingly. Also as a heads up, don’t just rent for a super low price. I’ve found this attracts the wrong kind of tenants who don’t take care of the home the way you would want them to.
Step 4: Time the lease to end when you want to list
Here’s the part you may not have thought about, and it determines whether or not this whole plan works.
A standard twelve month lease signed in October ends in October. That puts you right back where you are today, listing into the worst window of the year, and you'll have spent a year to arrive at the same problem.
What you want is a lease that ends in late winter, so the house is empty, cleaned up, and ready the week the spring market opens. Depending on when you sign, that might mean asking for a shorter initial term, a slightly longer one, or simply a specific end date instead of a standard twelve months. Say this to your management company before they write the lease, not after.
It's also worth deciding now whether you'd be willing to sell with a tenant still living there. It can be done, but showings get harder and you're depending on someone else's cooperation to sell your house. An empty house in March is a much easier sale.
Get this step right and the year does exactly what you wanted it to do.
Step 5: Questions to ask your CPA before you rent
Your management company handles everything except the taxes, so call your CPA before you sign a lease. Sometimes there are tax benefits, sometimes there’s extra taxes from the income. It's a short conversation and it's much better to have up front.
Here's what to ask:
Will the rental income change what I owe, and should I be making estimated payments? The rent counts as income, and depending on your situation your accountant may want you paying through the year instead of taking one surprise hit next April.
Which of my expenses can I deduct? The management fee, repairs, insurance, and the city license generally come off against the rental income. Ask which of yours qualify, and start keeping receipts the day your tenant moves in.
How should we handle depreciation for a single rental year? When you eventually sell, the IRS can treat you as having claimed depreciation whether you actually did or not, so most accountants will tell you to claim it.
While you're making calls, check with your insurance agent too. A standard homeowner's policy usually doesn't cover a house you're renting out, and you'll want that sorted before anyone moves in.
So why am I telling you to rent it out?
Because sometimes it's just the right call.
Selling under pressure is how people end up taking an offer they didn't want. When the mortgage is squeezing you, every week that passes makes you a little more willing to say yes to a number you'd have laughed at in June. A tenant takes that pressure off. You get six months of somebody else covering the payment, and then you list in the spring because you chose to, not because you had to.
Holding isn't losing. Sometimes a year is exactly what your sale needs.
One client I worked with decided she wanted to get out of condo living and get into a townhome or single family home. When she came to me with this concern we looked at how condos were selling and it was very slow. As we talked through the options she decided to rent her condo out to family and friends and revisit in a year. This would give the condo market time to improve and allow her some time to explore different areas to decide where she wanted to live.
TL;DR - The Short Version
If your house didn't sell and you don't want to drop your price, renting it out until spring buys you time. You already did the prep work this summer, so keep the repairs to the safety items, the furnace, the locks, and appliances if the house needs them. Then hire a property management company, and they'll handle the screening, the lease, and the maintenance calls. Walk in knowing roughly what your house should rent for, so you can tell whether they're pricing it to fill it. Tell them before they write the lease that you're selling in the spring, so the term ends in late winter instead of dropping you back into a fall market. And call your CPA before you sign, because the rent counts as income, most of your costs are deductible, and they'll want to talk with you about depreciation.
Renting isn't giving up on selling. It's choosing when you sell, and coming back in the spring with a house that's ready and a plan that works.
If you're weighing renting against relisting and you want someone to run the real numbers with you, book a free Q&A. It's a no-pressure coffee or tea chat at KAPRealEstate.com/book.
I'll tell you what I'd do, even when the answer isn't to hire me.
Kevin A Petersen is an LGBTQ+ affirming real estate agent serving buyers and sellers throughout the Salt Lake City area. Schedule a no-pressure conversation about your home buying goals.
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