Pros and Cons of Renting Your Home while Trying to Sell it
July 17, 2017
Buying one of the new homes in Auburn AL before you sell your old house typically means you wind up paying two mortgages instead of one for a time. If your old home sells shortly after you move into the new property, it’s not much of a problem. But if your old property languishes on the market for a few months, the dual payments can quickly become a big financial burden.
One solution is to rent your old home while trying to sell it, so the rental income can help cover your mortgage payment. You might even profit from this deal, if you can charge more on a monthly basis than what you owe. However, this strategy does not come without risks. The challenge is to find tenants who understand that this is a temporary lease, and once a buyer is found, they will be expected to move out in a short amount of time.
Your prospective tenant must also be expected to allow prospective buyers into the home. You, as the landlord, will have to give the tenant at least 24 hour notice before showing the property. The tenant has to be willing to leave the house and keep it clean at all times. And once a buyer is found, most laws require you to give your tenant a 30 day notice to move out. If you decide to go this route, make sure you have a binding lease with clear instructions on your expectations, and plenty of patience.
One of the drawbacks to renting your home is that the sale could take even longer than expected, and you might make less money on the deal too. Potential buyers will likely expect more concessions from you because of the rental situation. Here are two alternatives that could make renting more acceptable.
- Caretaker – You could find a caretaker for your home instead. This person understands that the home needs to be maintained for prospective buyers to view, and understands that this arrangement is a temporary one. Many cities have one or two home caretaker organizations that will place people in homes for sale.
- Short-term Rental – You could rent your home for a few nights at a time with a service like Airbnb. This saves you from the hassle of dealing with a long-term tenant, and you can often charge more per night than you can per week or month. However, you will need to leave furnishings in your home that your rental guests can use.
If you’re ready to put your home on the market, Rose Anne Erickson Realty can help you find a buyer in a timely fashion, and advise you in the search for new homes in Auburn AL. Call us today at 706-257-1776 for more information.
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Categorised in: Community Info, Design Tips, Market Tips
This post was written by Rose Anne Erickson
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