Davidson Realty, Inc.

Is Renting the Answer to Real Estate Woes?

February 15, 2010

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Posted by in Rentals

Elsie Evans (cropped)Recently I was having a conversation with friends concerning the advantages of renting their property.  After we were finished with our discussion, I decided it might be worthwhile to pass along the information.

My friends have two houses. They live in one and the other is up for sale. However, it is not selling, so they are carrying two mortgages.  At this point, they are not behind in either of their mortgages, but it is a major struggle to stay current and it is getting harder every month to make both mortgage payments. 

I asked them why they don’t rent the house that they’re not living in to help defray their cost. The rental market is absolutely excellent right now and I believe it will remain that way for a long time.  They said their mortgage is $2,000 a month and they can only get about $1,500 if they rent it.

I asked them to step back and consider that right now they are paying an additional $2000 month, plus the mortgage on their primary residence. So if they did receive $1,500 in rent for the property, they would only have to supplement the mortgage by $500 instead of $2,000. Wouldn’t it be nice use that $1,500 for other things? 

Since they aren’t behind yet, they could reduce their output by $1,500 per month, rent the property for a year, then re-evaluate if the time is right to sell it. By then prices may have increased and they will be able to sell their property for more money and they will save their credit from being affected.  If you’re in a similar situation, think about this side of the equation. It may be an answer for you too!

This blog was written by Elsie Evans with Davidson Property Management. Give her a call at (904) 484-2170 if you would like more information on renting.

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