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Should you Sell, or Turn Your Home into a Rental Property?



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By : Alan Barker    99 or more times read
Real estate owners have many reasons to move. Some of the time it's out of necessity, other times it's simply to move into a more desirable home. In the current economy, and with mortgage interest rates as low as they are, the best long term financial decision is probably to rent a house out rather than sell it at a steep discount.

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.


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