Home Selling in Queen Creek>Question Details

Becky, Both Buyer and Seller in Gilbert, AZ

Is renting out a home a good idea until market improves? Should it be rent with option to purchase or own?

Asked by Becky, Gilbert, AZ Thu Oct 2, 2008

We have tried to sell our home and haven't been successful because there are so many deals now and we just want to move. We are thinking of renting it and wonder if there are people in the area that it is a good idea to do this? What is the average rent for a 4 bedroom, 2 bath, 1700 sf home in Queen Creek? Is it wise to do a rent to own or option to purchase? IF we go through a realtor to help us rent what do they get out of it?

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HI Becky,

Leasing your home can be a very good alternative in our current real estate market. Trying to sell a home now can be quite a challenge & maybe even impossible. The rent-to-own or lease option or lease purchase options can be very advantageous to you.

You are correct that there are many good deals available for home buyers. However, if you are thinking of buying another home while you own another one, most lenders won't give you a loan to buy another home, unless you have at least 20% equity in your current home. This new guideline is used to prevent people from buying another home and letting their current home go into foreclosure.

But there is nothing stopping you from renting your current home & moving into a home that you also want to rent. You asked about what a REALTOR would get out of helping you. Well, each REALTOR has different fee schedules and everything is negotiable.

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PAUL WELDEN
REALTOR
HomeSmart Real Estate
1 vote Thank Flag Link Thu Oct 2, 2008
Becky
you need to do your homework.
I've been in your shoes and it is critical for you to talk with your CPA regarding the tax consequences. Converting a primary residence to a rental property is a permanent switch (no do-overs) so learning not only what happens when you have an investment property instead of a personal residence, and also what your options are then you sell.

Always begin with the end in mind.

A Realtor could be a big help, particularly if you are moving out of area. Typically you pay a leasing fee when they lease the property, then a maintenance fee per month. Note that not all Realtors work with rental property, so one with property management experience would be a plus.

Keith
1 vote Thank Flag Link Thu Oct 2, 2008
Keith Sorem, Real Estate Pro in Glendale, CA
MVP'08
Contact
If you can get a loan without selling, this is a great option! It's like the best of both worlds! Buy low...wait and sell high! Key is getting a good tenant and being comfortable with the possibility that you might have some additional expenses until you can sell for a better price!
1 vote Thank Flag Link Thu Oct 2, 2008
I ran a check on the MLS and there are currently 17 properties available for lease in Queen Creek 4 bedroom 1600 to 1800 sq ft with prices between $850 and $1275. Hope this helps.
Jeff
1 vote Thank Flag Link Thu Oct 2, 2008
There are many owners considering this option! However if you must sell check with a lender to make sure you qualify for a loan. I spoke with a lender a few days ago and the lenders are requesting 20% equity in a rental home as part of the contingencies on a home loan.

I think one months rent is fair or 6% as there is a lot of work in it! You will want to find a quality managent company.

Feel free to call with any questions! Lucinda 602-799-6846
1 vote Thank Flag Link Thu Oct 2, 2008
If you can't sale a home renting is a GREAT option, lease rates have increased across the country. Realtors fees can vary however for tenant agents rep NEVER pay less than 50% of 1st months rent.
http://www.lynn911.com http://www.homes-for-sale-dallas.com
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1 vote Thank Flag Link Thu Oct 2, 2008
Hi Becky - we did exactly that and have found so far anyway it was a great option. If you sell the house within 3 years of renting it out, you can still claim the capital gains exemption (assuming you lived there for at least 2 years before). It's a good way to make a step up in homes and better manage the timing as well. The rental market is still pretty good too, especially with the banks making it that much harder to obtain a loan.

There are lots of options out there for management of the property - you can do it yourself (find a tenant using Craigslist), hire a property management company to do it all - (we work with several, I can recommend a few we love) and / or you can have a Repair and Maintenance company on call to service the property as needed. Our company offers this type of service, call us if there is anything we can do. We specialize in investment properties and get homes ready to rent or sell. Our company motto is "We Make it Rent Ready". Good luck with your decision! Gina
0 votes Thank Flag Link Sat Nov 1, 2008
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