After Bankruptcy: Is Renting A Viable Option
As a Consumer Bankruptcy Attorney on the West Coast of Florida, I see many people deciding to file bankruptcy everyday, and these individuals make the tough choice of surrendering their homes in the bankruptcy process. As if bankruptcy alone isn't enough, these individuals are making another tough choice and walking away from their homes. For most, it is the best financial decision because they quite simply cannot afford the homes with the exotic mortgage that they were coaxed into using (that's the subject of another blog or blogs).
However, anyone who has ever filed for bankruptcy or considered filing for bankruptcy knows, the decision to file for bankruptcy is a very emotional decision as well as it is financial. Likewise, the decision to surrender a home comes with quite a bit of emotional baggage. I work with clients who surrender their homes after living in the homes for twenty years or more. In ten or twenty years, a person can have quite a few memories and emotional ties to their home. Likewise, these same individuals are not used to being renters, and they have tough questions about the rental market, what to expect, and why it is a good decision to rent after bankruptcy.
Renting is a very viable option, but it does not come without the renter asking some tough questions and doing a little research. Here is what is going on in Florida right now. Investors may have bit off a little more than they can chew with residential single family homes. Several years ago it seemed everyone was purchasing a second home as an investment property. Equity was going through the roof , and access to that equity gave the investors more access to capital to make more investments. Everything was good back then, however, things have changed dramatically in the last couple of years. Now these same investors that were riding high a couple of years ago are now spending more money than they are making each month. In other words, they are bleeding cash. Which means that they are willing to put anyone in their investment properties to slow down the bleeding. Unfortunately, what does this mean for the potential renters. Well, it means a renter's market. On the surface this is a good thing. When we dig a little deeper, we realize that there are no guarantees in the rental market anymore. Ask yourself: How can I be sure that my contract will protect me? How do I know that my landlord is using the rent money to pay the taxes, insurance and the mortgage? Quite simply, you don't know. I wrote a more indepth blog on this topic at: http://www.bankruptcylawnetwork.com The blog discussed why landlords are having just as much trouble as the renters discussed here. To both parties I say, be careful, be cautious, be ethical and honest in all of your transactions. It just may save you headaches at the end of the day.
