We want to relocate but housing market is slow... what are our options?

Question

My husband has been offered a job in our home state and we really want to move. The only thing holding us back is the thought of trying to sell our current home. We have been told by 2 realtors to prepare for our house to sit on the market for a year.

I brought up the option of renting out the house but my husband is against it. Is there anything out there that protects the home owner from any damages done to the property by a renter? What about ensuring that the rent is paid? Would going through a property manager help with those things? Also we would be 6 hours away and wouldn't be able to come over if something went wrong at the house.

Are there any other options we could consider?

Answer 1

You may have to rethink your move to the home state.  It was wrong for a realty agent to give you a 1 year selling-time.  Every house has a value to sell it today.  Find out exactly what that is.  You may not accept it but you have to know it.

I am a landlord.  I learned the hard way that a long-distance rental is a mistake.  No property manager will take care of your house like you will.  They just can't.  They have to manage 50 properties to make a living.  It's not that the tenants will trash your house.  They are more likely to call you 2 months after moving in to say that they are moving back to their home state and they are sorry but they have already moved out.  Your mortgage payment must be paid.

If you have to move, then you have to sell for today's price.  If that means losing every penny you put into the place, do it.  If you can't afford to do it,  don't move.

Or are you ready to just "walk away".

Answer 2

Unfortunately, there is not anything that you can do that will ensure that eveything will go smoothly.  Property management can help but they can't guarentee your tenant will pay on time.  However, you can greatly improve your chances by doing some due diligence and checking out your renters.  Renting a property is like opening a business and you really should treat it the same way.  If possible, you can always try and sell your house cheap.  Its the best way to attract buyers.  I know that may mean you may get less but your house is only worth what someone is willing to pay for it.  Besides, you would be rid of the house and not have to worry about it anymore.  You could try some creative financing ideas such as seller carried financing.  It makes it easier for home buyers to purchase especially if they don't quite have all the down payment they would need to qualify.  Sounds like you spoke with some lazy realtors.

Other than renting, you could try a lease to own contract.  You could put in the lease that the renter/buyer is responsible for paying taxes and upkeep or just make sure that is accounted for in the monthly lease payment.  After a certain period, the renter/buyer would have the option of purchasing the property at a set determined price minus credit for on-time lease payments.  Since the renter/buyer would be responsible for upkeep then you wouldn't have to worry about going by the house to make sure everything is ok.  This also gives the renter/buyer the sense that thier money is going towards the purchase of a house so they will probably be more likely to take care of the place.

Another option is a "wrap-around mortgage" .  Its harder to do in some states but can be done in most states (If you can't do a wrap-around mortgage use the lease to own method as it effectively will do the same thing if the lease contract is written correctly).  Its when you essentially sell your house and become the bank.  For example, let say you have a $100,000 mortgage on a home with a $800 monthly payment.  You sell your home to a buyer for lets say $125,000 at a $1100 payment.  You would create a note for $125,000 and have it recorded as a 2nd mortgage on the property.  So the property would have a 1st mortgage in your name and a seller created 2nd mortgage in the name of your buyer.  Because you are selling the property, the title to the home would be transferred to the buyer.  The buyer would send you or your attorney the monthly payments of $1100.  You would turn around and pay $800 to the 1st mortgage on the property and pocket $300.  You would not have to worry about taxes, insurance, or upkeep because title is now in the buyers name and thier responsibility.  A few years down the road, the buyer can refinance the property and pay you an amount equal to the sale price minus principal paid and minus your 1st mortgage.  If for some reason  they don't pay you, you can foreclose on the property and take the house back.

You should speak to a real estate attorney in your area about these options as there are pro's and con's.  Preferably one that owns rental property or you can also find a real estate investment group in your area that are familiar with the laws in your state.  Also be sure to pick up a few books on real estate investing in a local bookstore.  They can be very informative.  I don't recommend speaking with a real estate agent about these options as most will have no idea what you are talking about and none of these options will generate a commission for them.

These are the methods I use and have had success.

Hope this helps and good luck.