What to Do When You Can’t Sell Your Home…

Maybe you are in a position where you have double mortgages because it was easier to purchase your new home than to sell your old home.  Or, maybe you have too high of a mortgage payment and need some financial relief to avoid foreclosure.  Or, maybe you were relocated by your company or moved due to some unforeseen circumstances in your family. 

No matter how you got here, you know have a real estate property that you desperately want sold but there are several others in your neighborhood for sale like it (and there may even be a foreclosure or two), making your home look less attractive compared to these discounted homes to any would-be buyers.  What’s a desperate house-seller to do? Rent, rent and I’ll say it again, RENT!

Now before you say, but I don’t want the hassle of “deadbeat tenants that aren’t going to pay rent and are going to destroy my real estate property” let’s review why temporarily renting out your home while you wait for your neighborhood real estate market to recover will be the best thing you can do at this time.

1. Income!

Instead of going into foreclosure, wiping out your savings, or just having a financial burden, why not put your real estate to work for you?  Instead of this home sitting abandoned for months while you wait for the market to recover and the home to sell, you can rent out the home, earn income that can cover your mortgage payments (or get close to covering them), and still allow it to be listed for sale.  We are apart of a society that loves to multi-task so why should this skill end once we are home - multi-task and earn revenue while you wait for your home to sell.

2. Ready-Made Buyer

Another advantage of renting your home while you list it for sale (or just wait for the real estate market in your area to recover before listing it), is your tenant may very well become your next Buyer!  In this market, many who desire to be homeowners just may not have the savings or credit to do so and the next best thing for them is to rent until they can own.  Many may prefer a house over an apartment, making your home prime rental property. 

This may translate into you doing a lease purchase agreement where at the end of a lease (typically 1-5 years), you have a Buyer who has already signed the Purchase Agreement for your home.  However, if you are not even willing to be a landlord for in some cases only a year, you may never find this Buyer.  Instead of having a year of receiving rental income from a potential Buyer because you decided to rent, you spend a year frustrated with the real estate market and your real estate agent that your property has not sold - but you did not adjust to the times.  If nothing else, this market should be teaching everyone to be fluid and flexible.

4. Screen To Keep It Clean

But what if I get the bad tenant that won’t pay rent, calls me for every petty thing, and does far too much damage to the home?  The answer is simple - you have to do a great job of screening potential tenants and beyond that having an air-tight lease that protects you and your property.  During the screening process, it is important to not allow desperation to rule and take over.  Depending on your state of mind, it may even be best to have a qualified third party conduct the tenant selection process.  As I have seen so many times before, when one takes the time on the front-end to properly screen tenants, then they will enjoy the landlord journey.  It is only when one takes shortcuts on the front-end and does not do an adequate job screening or even enacting a iron-clad legal lease, that the tenant becomes the landlord’s worst nightmare on the back end.

Want to learn more about the rental process or leases that should be used?  I’d be glad to answer any questions so feel free to contact me at ldavenport@remax.net.