If You Can’t Sell

by Mario Acosta on January 28, 2013

in Local Topics, Market Trends, Sellers

Does A Sale Make Sense?

I have been running into a situation that I want to share with you this week. I have recently run into a number of couples who would like to move into a different house. The reasons all vary, from kids who are off to college, the desire to live in a different area or an expanding family that needs more room. They want to move but feel that it’s just not the time to sell. So today I want to talk about what you can do if you can’t or don’t want to sell your existing home.

You can move to another home for less than the income you could get for renting your home. Rents are up just as many mortgages have adjusted down. If those two statements ring true for you, becoming a landlord might not be a bad idea. The housing recovery is underway, but it could still take years for many homeowners to surface from their underwater status. Selling now would be selling at a loss.
Other homeowners aren’t underwater, but don’t have enough equity to sell at a decent profit. Selling now could be only a break-even proposition. Homeowners stuck with a mortgage larger than the value of their home, are cashing in on rising rents by renting out their existing home and moving to a home that costs less – if only temporarily. The deal can even work if the home you move to costs the same as or even more than your current housing costs, provided your new housing costs are sufficiently offset by the rental income from your existing home. So before you put off moving, do the math. Your agent can help you find what the rents would be on your current home and help you understand your options. In the best of all worlds, the rent should cover not only your existing home’s mortgage, but property taxes, insurance, upkeep and other costs of owning a home. If not, you’ll have to make up the difference. In today’s skyrocketing rental market, it’s likely you can swing the rental income you need.

However, you face a greater obstacle than making the deal pencil. Hiring a property manager could cut into your rental income, but landlording, especially for first-timers, is not a piece of cake. It is very doable with a little advice and education. Over the next few weeks I will help you understand how you too can become a landlord and make that move you have been considering. With the help of a good agent and a little patience this could be the answer to making that next move. Have a great week!

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Post by Mario Acosta

Mario has written 117 articles.

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