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.