Can I do a short sale
on my rental home
? I get asked this question all the time by folks who own investment properties
, and contrary to what many people think - the answer is yes, you can do a short sale
on an investment property
(aka, non-primary residence, rental homes, rental duplexes, etc). Oh
really, you ask in disbelief? Yes really. I have closed several short sales
under these circumstances....and I have several of them underway right now.
Do the dynamics of these short sales
change at all? A little. Mainly because occasionally tenants occupy
these homes and we have to delicately deal with showings, the existing
lease agreement terms, and a few other things. Or if the house is
vacant, we may want to strategize the best way to keep the house secure
and free from vandalism or burglary.
In terms of how a short sale lender or bank looks at these short sales
, again they are still looking at potential seller hardship
, loss of market value of the property, and the lender's total losses. Short sale sellers
of investment property
should ask themselves:
the monthly rent covering the costs of the mortgage payment, in
addition to other monthly operating expenses (like certain utilities,
property taxes, maintenance, etc)?
- How big is my deficit every
month, given the best case scenario of 100% occupancy? In other words,
how much money am I loosing each month given the fact my tenants always
pay their rent on time, and the house is always rented)?
- Has the property been vandalized by the current or former tenants? Is it 'rentable' in its current condition?
- Have you been unable to rent the house due to high area vacancy rates or other neighborhood factors?
you an "accidental landlord?" In other words, for example did two
people who owned homes individually get married, causing you to need to
rent one of the homes in order to live together? Or perhaps did you
inherit the home? Did you purchase the home for your college-age kids to
live in, and now they have graduated and moved out? Did you co-sign for
someone who now can not pay the mortgage?
- Did you suffer
some other loss of income (loss of employment, pay reduction, etc.) and
now have to choose between keeping your current, primary residence and
letting your rental property go?
There are many reasons to short sale investment
or rental property
. If you are contemplating a short sale
for your Sacramento
or rental property
, I welcome your call to see if we are a fit to work together.