Home Rentals on the Auction Block?
Going, going...rented! In the current state of the real estate market, auctioning homes for sale has become quite common, but auctioning rental homes remains unusual. Certainly it seemed unusual to Neal VanDeRee, owner of the VanDeRee Auction Company in Venice, Fla., when his late father, George VanDeRee, who started the company, introduced the idea to him years ago while they stood in front of an unoccupied rental he owned.
"The previous tenants had moved out, and he and I were meeting with some new tenant prospects," VanDeRee told AOL Real Estate. "He said to me 'You know, someday I'd like to try and auction the rent for this house.'... My first reaction was that it did not make any sense."
More recently, VanDeRee decided his father's idea was not so crazy after all.
So he gave it a shot. For the first rental property, a home in Venice, the bidding began at $400 and ended at $900, within $50 of what the owner had hoped for. Eight bidders participated, one by phone. The terms were that the tenant had to have first and last month's rent and security deposit ready at the auction. The keys and rental agreements would be signed and turned over within 24 to 48 hours, after a background and reference check.
VanDeRee's second rental auction is turning into a sale. He is currently in discussions with the high bidder on what he describes as a "somewhat complicated purchase arrangement that will be beneficial to all."
Now that he's found how to successfully auction the home rentals, he hopes to provide the service for Realtors in the area and around the country, as well as clients in need of quick and mutually fair results. He has already had conversations with Realtors on the subject of his unique service and VanDeRee is ready and says, "I have a gavel and I can travel."
The question remains, will enough people be interested in this type of auctioning and will it gain national
"Inasmuch as I am a Realtor as well as an auctioneer, I welcome the idea of working throughout Florida and around the country with other Realtors to help their clients rent properties quickly rather than sitting and waiting for them to become occupied or chasing the rental market as it goes down," VanDeRee says.
If the auction idea takes off, it could have a positive effect on the market by establishing real rental market values, and perhaps lower-priced. As more residential rents are auctioned less properties will be available and both tenants and landlords will be happier with their situations.
"A rented property not only brings instant cash to the investor but it also makes use of the buildings rather than allowing them to go to waste," he said.
Want to know how to deal with other rental issues? Here are some AOL Real Estate guides that can help:
- Tips for Finding a Rental Apartment
- Apartment Security for Renters
- Are You Paying Too Much for Your Rental?