? Take for sale house off the market to rent

lafdrOctober 2, 2013

My former house is in a slow sale neighborhood. We knew it could take 1-2 years to sell. We have caretakers that pay low rent to an agency in return for having the house show ready at all times and maintaining the yard and paying utilities.

If we can find a market value tenant to rent, it would take financial pressure off of us to sell the house. With the hope that the market will pick up in the future and the house may even go up in value. If rented, we will take it off the sale market.

Since there are only a small number of buyers in the price range (699k), if we rent and take it off the sale market, we may lose that rare buyer that would want it.

Would you keep it for sale waiting for the right buyer? Or try to rent it to get the cash flow now?

Negatives to renting: wear and tear, being responsible for major appliances and other repairs and expenses, missing a buyer, expense of carrying new house mortgage longer.

Positives to renting: Cash flow, market may improve and make it sell faster possibly for more $ in the future.

What would you do? What am I missing?

We already have a landlord type homeowners insurance on it, so our insurance costs won's change.

Realtors have given us feedback that it is priced well, even below what they thought it could sell for. Not my own realtor, several others who were not biased by having the listing.

I am aware of the tax effects of selling more than 3 years after occupying.

Thanks for your comments.

Lafdr

Thank you for reporting this comment. Undo
weedyacres

What rent are you getting now?
What would market rent be?
What's your mortgage payment?
How hard is it to find renters who want a home as nice/expensive as yours?
How long has it been on the market?

    Bookmark   October 2, 2013 at 10:52AM
Thank you for reporting this comment. Undo
kirkhall

I'm with weedy...
You need to know what your renter market looks like. For a 700k home, you are probably looking at a 3k/mo rent (at least in my area, that would be true). How many people are in that rental market?

You could spend some time looking for a renter.

If that is the case, why not have it "for rent or sale"?

    Bookmark   October 2, 2013 at 1:23PM
Thank you for reporting this comment. Undo
lafdr

We get zero rent. It is a caretaker agency. We pay them nothing. They do yard work and pay utilities. ((They are collecting a nominal rent of I believe $680/month)). The caretaker tenant pays a little for a nice house. But may have to move after as little as 2 weeks with only 2-4 weeks notice at their own expense. They have weekly inspections and have to be show ready within an hour at all times. I was afraid to just get a tenant since I wanted the house on the market. And an empty house has it's own issues. This seemed the best of both worlds.

I believe fair market value would be about 2700-3000$/month. But it would have to be off the for sale market.

My carrying costs on the house are under $1000/month including insurance, taxes, home equity loan. It is saving me ?$500/month utilities and yardwork to have caretakers there.

It may take awhile to rent since it is a high for the rental market, so I can list for sale or lease and see what happens first.

    Bookmark   October 2, 2013 at 11:39PM
Thank you for reporting this comment. Undo
jane__ny

What State are you in? What type of area, near a big City? If you have the best house in a lousy neighborhood, you'd have to lower your price. Its important to know where your house is.

Jane

    Bookmark   October 6, 2013 at 8:15PM
Thank you for reporting this comment. Undo
marvelousmarvin

Why not rent it out and also try to sell it at the same time while its a rental?

I've seen this before where a house is on the market, even though it's being rented. The owner gives a sizeable discount to the renter to keep it clean, and to go out of the house when potential buyers check the place.

As you said, there's not a lot of buyers at that price range so it wouldn't be that much of an inconvenience to a renter
to agree to stay out of the way if somebody wanted to see it.

    Bookmark   October 29, 2013 at 1:51AM
Sign Up to comment
More Discussions
What qualifies an offer as a "low ball"?
Hello! Im on the house hunting side of things now! I...
karin_2015
what do you do with mail that comes for previous occupants?
I always get mail that is meant for previous occupants...
tlbean2004
Real Estate Agent Fees
My nephew is selling his condo, the agent that is selling...
enjoyingspring
After months of preparation, house is now listed
This is such a big deal for us, we have been planning...
hollynla
Do buyers prefer table & chairs or island in kitchen?
We are getting our house in order before listing it...
pinkpaula
Sponsored Products
Hampton Double Chaise with Cushions in Off-White Finish, Patio Furniture
FRONTGATE
Solid Brass Cabinet Latch with Flower Knob
Signature Hardware
Area Rug: John Black 10' x 14'
Home Depot
Robin Canary Loran Headboard
Cost Plus World Market
Tricorn Black Lido Floor Lamp
Lamps Plus
BEGA | LED Garden and Pathway Bollard - 7265/7266
$467.00 | YLighting
Claremont Aged Brass Wall Sconce
$482.00 | Bellacor
Farberware Savory Sand Flatware -Set of 60 - 263760FW19DS
$119.99 | Hayneedle
© 2015 Houzz Inc. Houzz® The new way to design your home™