9 Replies Latest reply on Apr 13, 2011 1:27 PM by basparks

    Sell home or rent and wait

    dmitche2
      Our home is worth 1/3 to 1/2 of what we paid for it 5 years ago. We have now decided that we want to move back to our home state across the country to be near family.  We've had the house on the market for 6 months with no offers, so now we are considering renting it out and waiting for the market to change.  We have put a lot of upscale improvements in the home and hate to see renters trash it.  We are at a crossroads and just don't know what to do.  My husband is retired and I'm almost there.  Any advice?
        • Re: Sell home or rent and wait
          JerryD
          Doesn't sound like you're in a rush. Be very, very selective on whom you rent to.
          • Re: Sell home or rent and wait
            Chrysalis

            I can think of 2 things you can do.

            The first would be to hire a propert manager to rent out and keep an eye on your property and find new renters if necessary. If you just break even on the expenses, you'll be doing OK.

            The second suggestion would be seller financing. If you can sell the house but hold the mortgage yourself, perhaps with a 5-year balloon payment, you could get a better price.

              • Re: Sell home or rent and wait
                DeltaDawn

                We, too, had the same dilemma when we were transferred to another state.  We managed for 10 years to rent our home with the help of family, friends, and some hired help.  It worked for us.  The best advice I can give you is screen, screen, screen.  It avoids many problems.  We had a couple of bad apples over the years, but nothing major.  You should market your house as an "executive residence," and contact local companies, hospitals, colleges, that may have people moving to the area that would be potential tenants.

                 

                 

                  • Re: Sell home or rent and wait
                    gianni

                    If it is worth a 1/3 to a 1/2 _after_ lots of improvements then you could be waiting a lot of years.  

                    We incidentally are in the same boat, and we are just figuring whether we can retire without the equity in the house.  We figure that the house has no value (to us), so we could just walk away, and it would be a weight off our shoulders and a credit score hit for a few years.  We have done the numbers and figure that the costs of keeping the house far outweigh the likely capital gain as it creeps back up to the mortgage value and into positive territory over the next 10 years. 

                      • Re: Sell home or rent and wait
                        DeltaDawn

                        Our solution has been to refinance our primary residence (which has a small home equity line against it) and fold in the mortgage on our rental property, which will cut our payment in half and give us the income rather than what we've been paying the bank.  Our situation is somewhat unique as the rental property is considered a commercial loan and we're paying higher interest.  The residential loan will be a couple of points lower and between the 2 loans, we will be saving half.

                        The plan is to sell it when price are closer to normal and pay off the entire mortgage and. one hopes, have a nest egg left over.

                        Not sure if this will be helpful to you or not.  Good luck. 

                  • Re: Sell home or rent and wait
                    smurphy
                    Go ahead and sell the house. We are also selling inorder to retire to South Carolina. This weekend we finally realized that the housing market is like selling potatos--a commodity market. Yeah, we would love to get the same price we paid three years ago, but it is not going to happen this year or for several more. We decided to reduce our price by $15K to be competitive in the marketplace with other listings, new construction and for-sale-by-owners. It is time to sell and move this year. Waiting will not improve our situation. Obama is not doing things that are conducive to helping the market. Higher rates are coming. Availability of qualified buyers is decreasing. Inflation will hurt all of us. No panic, just reality.
                      • Re: Sell home or rent and wait
                        Penuel9

                        If you decide to rent and are too far away to manage the rental yourself, hire a property manager to take care of rental and maintenance. They usually charge 10-20%.- -A. Penuel

                         

                          • Re: Sell home or rent and wait
                            jerrymann
                            Hire a property manager.  They do all the screening, collect the rent, take care of repairs, and watch out for your interests.  I currently rent out our original residence in Los Angeles and now live in North Carolina.  Having the manager take care of all of the work is absolutely worth the commission they receive.
                              • Re: Sell home or rent and wait
                                basparks
                                Before you decide to turn your rental property over to a property management firm, determine your tax consequences. Use a management company to help you rent your house but be sure to collect the rent and pay the bills if at all possible as you will get a higher deduction on your taxes. I've maintained out-of-state property for years this way as I've had to move around quite a bit with my work and have rental properties I want to hang onto. Talk to your tax consultant so you know the consequences of your decision.