Homeowners stuck with a mortgage larger than the value of their home, can cash in on rising rents by renting out their existing home to move up, down or sideways to a different home or affordable rental and avoid selling at a loss – for now.
That’s because, while it may be impossible to sell an existing home for the balance of the mortgage, rents are rising faster than home values and may cover that monthly mortgage payment and more.
From 2006 to 2011, home prices had dipped by 32 percent in major cities. Meanwhile, during the same period, rents skyrocketed 20 percent.
Christine Karpinski, HowToRentByOwner.com real estate investor and author of “How To Rent Vacation Properties By Owner” (Kinney Pollack Press, $26), says for both vacation rentals or long term rentals, it’s a no-brainer.
“It’s the best of all worlds. No one wants to sell their home at the low prices, but everyone wants to buy during a down market. The solution? Buy the new home and hold your existing home to rent it out until the market rebounds,” Karpinski says.
However, YouCheckCredit.com, an online tenant screening and background checking service, says the deal can actually be a bit of a brainer.
You’ll have to become a landlord and that requires a skill set you may not possess.
The infographic below can help you get started.
Source: You Check Credit