Should you Sell, or Turn Your Home into a Rental Property?
With today's mortgage interest rates
as low as they are, rental rates generally exceed mortgage payments, especially
if you've owned your home for a little while and have some equity. By renting
out your hard to sell house, not only can you continue to build equity as your
house gets paid down, but you might also be able to generate extra cash flow
when rents exceed payments.
Plus, as the years pass by, your
property value, and your rental income will increase with inflation. Your
fixed mortgage will stay the same, and eventually, it will be paid off. By
owning rental real estate the renter pays the expenses for a long term asset.
Home loans for primary residences
are better than rates for properties purchased specifically for investment. By
living in a home, and then converting it into a rental property, mortgage terms
are more favorable.
One obstacle many potential
landlords face is that they can’t qualify for two mortgages. Even though the
rental revenue exceeds the mortgage payments, lenders require substantial
reserves (usually six months worth of payments) for rental property. They also
require that income falls within their Debt to Income guidelines.
Another roadblock many people have
with owning a rental property is that they just don’t want to be landlords.
They don’t want to get the phone calls in the middle of the night from
tenants who have leaky toilets.
This is easily overcome by hiring
a Logan UT property
management company. Hiring a property manager allows
real estate ownership without ever having to deal with tenants or home maintenance
issues.
It’s a tough time to sell Logan real estate right
now. If you can, you might be better off by finding a renter. Talk to a
mortgage lender or Logan real estate agent to see if renting your home is a realistic option for
your situation.
Posted at 10:36PM Dec 01, 2010 by Cornerstone Real Estate in Real Estate |