Rosalinda...

We prefer to sell too. We would rather sell than become Landlord's. There are other houses in the area that are older and not updated that have gotten so desperate and have dropped their prices substantially. How much of a loss do we take just to be competitive? That is the main reason we would like to rent. It would get us into the house that we want, and then keep what we put into the rental house until the market turns and we can sell. We just need a renter to commit.

Thanks for all of your advice!

Hi Debbie,

We have the 20%+ down for another home which would become our primary residence. This home would then turn into the rental property.

I am setting up an appt w/ the mortgage broker and the RE attorney. It is useful advice to do those things before moving forward.

I understand that there are risks. It is why I am researching this avenue before making the next move. Please see my previous answers about why we don't want to stay. Thanks!

Hi Janet,

Yes we are listed with a realtor. It is all a big risk, that is what she says. She also says that we need to be comfortable before deciding to do the rental thing. We would like to market the house for rent to see if we get a buyer before moving. There are not enough rental comps out there either, nor are we sure we could get what we would like in rent. No...we are not expecting to cover what we currently owe, but would be willing to make up a few hundred dollars a month.

It is totally renovated, but as I said in my previous answer, other homes in the area keep dropping, and some are more drastic than others. Do you chase the market and keep dropping with them? To be ahead of the market, you have to be competitive. But we don't want to take such a huge drop that we lose our shirts. Because then we would wind up owing $$. Yes, I understand we would make out on the flip side (buying) which is why we don't want to miss that opportunity either. As far as what is holding us back..... There are pros (everything new) and cons to the house, and I think the reassessment w/ town taxes recently is also an issue. I won't be more descriptive on here though.

I do appreciate your knowledge. Sorry for the late response. I just found the post again after registering.

Sharon and Karen....

When the house was renovated, it was renovated with the intention of another buyer to purchase, not for us to live there. We started the renovation before all of this "subprime" stuff came out in the market and in hindsight, it was not a wise move. This is our 2nd marriage and we were looking to dispose of our previous homes and find one together. No one blames us for that. There are Pros/Cons to the house, but aren't there in every home?

RE: loans and mortgages - Even though it is updated, sInce the prices of other homes have dropped in the area, our house may not appraise for whatever the appraisers are valuing it at. The appraisers use comps anyway. Since people have become desperate, others may be selling just to sell, at that lower number and that doesn't help us.

We do have a mortgage person and a real estate attorney, but before I took that next step, I wanted advice from others in the community. If our mortgage person is not as familiar with our situation, I may take you up on Joseph Farella's info.

Thanks for oyur assistance.

Carolyn...thanks for the helpful info. I will take a look at it.

https://www.efanniemae.com/lc/publications/pdf/landlord.pdf

Hello Ms. Johnson - check out this link. If you need further assistance please give me a call or email.

Carolyn Fenton
Realtor, GREEN Designation
RE/MAX Ridge Real Estate
c. 973-214-2166
Carolyn.Fenton@remax.net

Dear Ms. Johnson,

I am sorry to hear about your situation. Just like you many others feels that they are running out of choices when they cannot sell their homes for the price "they need" in order to move.

I am not sure why you and your husband moving out of your "tottaly renovated and bran spanking new" home. If you were my cliet, I would suggest talking to a mortgage consultant before making any decisions to find out if you can get approved for a mortgage without selling your home. There are many wonderful loans out there now. With that said, many have conditions such as limiting ownershing to only one home.

Additionally, once you rent the house you live in now, you will become an investor and the interest rates on buying a second home are different than your main residence. I know a wonderful person (Joseph Farella) that specialize in not so easy cases as yours and might be of great help to you.

I would also recommend consulting with a real estate attorney as to your rights as a landlord, if you choose this avenue. I have few great names that will be happy to assist you.

I wish you luck in making your tough decisions. Please feel free to contact me directly via my email SharonandKaren@prudentialnewjersey.com or my cell 917 294-0356 with any questions.

Sincerely,

Karen Abramson, Sale Associate
Prudential New Jersey Properties
50 E. Mt. Pleasant Ave.
Livingston, NJ 07039
Office 973.992.6363 ex.152
Cell 917.294.0356
SharonandKaren@prudentialnewjersey.com

There are way too many considerations here to get answers on a blog. Are you listed with a realtor? If so, what does your realtor have to say about these issues? You need to find a realtor you can trust and talk through these questions. There are many 'ifs' in the answers and you should consider all of them before making these decisions. There are risks in all of the options -- risk you need to minimize.

The market in Morris County has bottommed and inventory absorption rates are getting lower (which means that homes on the market are being sold at a faster pace), but your specific market and price point need to be explored before you make a decision to lower the price/sell or rely on renting. A much more normal market is expected in the Spring and those of us who pay close attention to market trends and statistics have reason to be very optimistic, but that does not mean that prices will rise (and unforseen factors could change that, but that's always true). I agree with Rosalinda that overpricing is a recipe for disaster. If your home is totally renovated and well priced, it should sell, even in a weak market. Something is holding you back -- price, location, condition (is it over-improved?)... something.

When thinking about this move, don't focus on the "loss" on price of your house, but rather, how much you have saved on the new one (compare today's prices to what they would have been for both homes at an earlier date --apples to apples). If you are moving up, you are probably making money. If you are moving down, you may still be making a move that makes you money in the long run because lower priced homes will increase in value faster than higher priced ones going forward. As you can see, we haven't even scratched the surface on the general pros/cons of renting, or answered your other concerns in depth, ... so get a realtor you can trust , get the facts...make an informed decision...and follow through.

Ms Johnson - hello!
If I understand you correctly......you want to rent out your home, which you can't sell without taking a loss, and then buy a new home. You are hoping to find a tenant to offset your expenses, and allow you to buy this new home.

I think the biggest issue you have is whether a bank would approve you for a new mortgage, assuming you would be looking for a mortgage. As you said, finding a tenant can be iffy....and being a landlord has a number of responsiblities attached to it. Every time something breaks - you are the one who is called!

Putting that asdie fo9r ne......what I think you need to do is sit down with a mortgage broker and see where you stand financially....see if this is even a viable option for you. It may not be.

Once you know where you stand in that respect, then you can investigate the pros and cons of being a landlord.

If you need a recommendation for a mortgage broker, please feel free to give me a call or email me.

Just curious - if your home is nice and new inside and totally renovated......why not just stay there and enjoy it for now? There are a lot of risks you will be taking by trying to do what you have suggested.

Best wishes with whatever you decide.
Debbie Rose
Prudential NJ Properties
email: debbie.Rose@PrudentialNewJersey.com

Well it sounds like you are really nervous about this situation... I suggest you talk with your husband and decide whether or not you really want to buy another house.. if so, I suggest you list your current property at market price, count your losses and move on ( to put it nicely). If you overprice, you are not going to sell!.. In this market, if you are buying low, you also have to sell low too.. consider the fact that you are getting a great deal with the new purchase.. being a landlord is a full time job I suggest you sell now, there are plenty of first time buyers who want to get the tax credit..