- The Washington Times - Wednesday, February 25, 2009

Michael B. Bennett used to own his home in Chesapeake, Va. Now he rents it, which is taking some getting used to. There are advantages. “If something goes bad - the hot water heater or the air conditioner - the people that own the house pay for it,” says Mr. Bennett, who lost the home to foreclosure a year ago.

On the other hand, “I don’t like saying I’m renting.”

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Mr. Bennett and his wife, Candace, are among millions of Americans who have become renters again after foreclosure. Though the transition from owner to renter can be difficult, real estate experts and financial consultants say it also can be an opportunity to change some things for the better, and they offer suggestions on how to make the most of renting after owning.

First, decide whether you want to rent an apartment, condo or house. Consider: People who have gone through a foreclosure may have an easier time renting directly from property owners than from apartment complexes, which tend to place more emphasis on credit history, says LaToya Irby, who offers financial advice on the Web site About.com.

Use your time as a renter to save money and repair your credit now that rent is often lower than a mortgage payment for comparable dwellings, says Ralph Roberts, who wrote “Foreclosure Self-Defense for Dummies.” Renters should stay current with bills and reduce credit card debt, he suggests, to improve their credit scores.

“That’s the plan,” agrees Mr. Bennett, 56, who hopes to be a homeowner again someday. He and his wife bought their home in August 2007 but then racked up medical expenses after he lost his job and health insurance. They fell behind on mortgage payments.

The Bennetts, who rent the home they lost in foreclosure from the investment company that bought it, hope to relocate to a more affordable area.

While some families may choose to stay in the same school district, others might use renting as an opportunity to move to a better one or get closer to work or cultural attractions. Neighborhoods that were too pricey when they were buying a home or paying taxes may be affordable when they’re renting, says Larry Cotter, general manager of the Web site Apartmenthomeliving.com.

“Living in a cultural center becomes a reality when you get rid of the notion that living in a home is the American dream,” he says.

The foreclosure crisis and accompanying real estate slump have created more rental homes, but there also are more reasons than ever for potential renters to be careful. Before renting a property, verify with the local tax collection agency that property taxes have been paid and see whether any paperwork related to the mortgage has been filed in civil court. Unpaid taxes or court filings could indicate the property owner is headed toward foreclosure.

“A lot of landlords are in trouble,” says Mr. Roberts, a real-estate agent in Sterling Heights, Mich. “Make sure the landlord you’re dealing with is current.”

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