By Nicole Friedman
Jim and Lindy Kennedy listed their three-bedroom house in Bluffton, S.C., in February 2025, but few buyers bothered to look at it. When a friend knew someone looking for a six-month rental, they decided to lease the house and try the market again in 2026.
When the tenant left, "the place was a disaster," Jim Kennedy said, especially the bathrooms. "It's such a nuisance and a hassle to have a rental property."
With home sellers tired of watching their listings languish in a dreary housing market, more of them are opting to take their chances by renting out their homes.
A near-record share of rental listings fall into this category of accidental landlord. About 2.2% of rental listings on Zillow in November had previously been listed for sale, according to a Zillow analysis. That's the highest level since late 2022 when mortgage rates surged above 7%. The rate of accidental landlords was roughly the same in December, the most recent available data.
It was even higher in markets where unsold listings are growing stale. Houston had the highest rate of accidental landlords in December, at 4.2%, followed by Denver; Austin, Texas; and Tampa, Fla., Zillow said.
The rise reflects a housing market that is tilting in favor of buyers. More sellers have been forced to cut prices or offer other financial incentives. If those tactics don't work, more of them are unwillingly becoming landlords.
Shivani and Bryce Bailey tried to sell a three-bedroom condo in Dallas starting in 2024, but their only buyer backed out. They initially had no plans to rent out the condo but started to consider it as the unit sat on the market, delaying their plans to buy a single-family home. They found a tenant last year, and the rent usually covers their monthly ownership costs.
"Maybe once there's a shift in the market, to where the seller-buyer disparity isn't nearly as bad, we would at least talk about whether we wanted to sell," Bryce Bailey said. "But for the time being, we aren't thinking about it at all."
Selling a home usually means stepping aside and letting a real-estate agent handle the process. But being a landlord often means getting your hands dirty. It comes with financial risks, including damage to the home, or disputes with tenants that many home sellers never imagined they would encounter.
Phoenix-area real-estate agent Neil Brooks said when his clients are considering renting out their homes, he encourages them to think through scenarios like evicting a tenant or getting sued.
"The pool in your backyard, let's say somebody drowns in that pool," he said. "There's going to be some liability there for you as a landlord."
Most of his clients ultimately decide to sell, Brooks said.
"A lot of these people, they've never been a landlord," said David Schlichter, a Compass agent in Denver. Even so, Denver's sluggish condo market is dissuading some owners from selling, he said.
"When it is a condo seller, more often than not my advice is, 'If you can, try not to sell it right now -- try to rent it,'" he said.
The math of becoming a landlord makes more sense for some homeowners than others. Those who bought their homes when mortgage rates were low can often charge rents that fully cover their monthly costs, whereas owners with high rates might be left making up the difference in the monthly payment.
Roderick Conrad and Suvimon Sunakorn rented out a two-bedroom condo in Silver Spring, Md., to avoid selling it at a loss after moving for a new job last year.
The rent covers only part of their ownership costs, and the property-management company takes a cut. They have had to shell out thousands of dollars for repairs, including replacing the washing machine and dishwasher, Conrad said.
"It's pretty frustrating," he said. "I kind of wish that I'd sold and moved on."
The increase in rental listings from would-be sellers can also soften the rental market with the new supply. Single-family rents in February rose 2.6% year over year, the slowest annual increase in Zillow data going back to 2015.
The rate of accidental landlords typically rises in the fall because sellers are more likely to throw in the towel ahead of the holiday season, when home sales are usually slow, said Kara Ng, senior economist at Zillow.
Some of the sellers who took their homes off the market in 2025 are trying again. About 3.6% of active listings in January had been delisted last year, the highest rate for any January in data going back to 2016, according to Redfin.
After enduring the hassle of tenants and deep-cleaning the bathrooms, the Kennedys relisted their South Carolina home in December at a lower price. This time, they are determined to sell.
Write to Nicole Friedman at nicole.friedman@wsj.com
(END) Dow Jones Newswires
March 22, 2026 05:30 ET (09:30 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
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