Monthly Archives: August 2010

To Sell or Lease?

To sell or lease?

Most owners I speak with are surprised that their mortgage payment has no correlation to the rental rate we are able to obtain on the property.  The rental rates are determined by what other similar units are leasing for in the area.

I have had a number of owners who have had their home on the market for sale for over a year.  They either cannot sell it or if they can sell the property, will be taking a huge loss.   This brings us back to the mortgage payment… in many cases, as soon as I provide an owner with an estimated rental rate for their property, their response is “ that will not cover my mortgage.” True, you may be coming out of pocket $100 or $200 per month to lease it out, but would you rather it sit vacant on the sales market and have to foot the entire mortgage payment yourself?  Would you like to take a $1200 loss over a year renting it out $100 under your mortgage payment or would you rather sell it now at a $20,000 loss?

It’s your choice.  It seems logical to me to lease it for a year or two until the market turns around and have a majority of your payments covered than to let it sit vacant or take a huge loss on the sale.

Don’t get me wrong, leasing is not for everyone.  Certainly, if you are not able to afford covering the mortgage payment during vacancy periods or if you cannot afford repairs as they arise, leasing may not not the best route for you.  But if you have a home that is sitting vacant on the sales market and you do not want to take a huge loss on the sales side, leasing might be your answer.

Kori

Investment peace-of-mind

I have an owner who has had their property on the market for over a year for sale.  They were in the process of moving out of town to take a new job.  We listed their property and found great applicants in less than two weeks.  After a year of struggling with it on the sales market, the owners can now start their new job with peace of mind knowing that their home is not going to just sit vacant.  After all, homes that sit vacant do not generate income!

Kori

All’s well that ends well!

I’ve been working with an couple to rent their townhouse.  The property rented within 30 days to a very qualified tenant.  The new resident wanted a move in within two days, but move-in cleaning could not be completed in time. She moved in and found the home wasn’t cleaned to her satisfaction, but was very happy to accept a $100 concession for cleaning and a touch-up paint job after her furniture was moved in. The owner of the property was thrilled that I was able to organize everything and had found her such a qualified new resident for her property.

Sallie