I may be relocating for my job and I am underwater on my current home. I am thinking of renting my home to help gain equity and wait on the market

Asked by The Duke, Wellington, FL Sun Feb 19, 2012

to come back. What are pros and cons?

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Laura Jaffe, , Wellington, FL
Sun Feb 19, 2012
Unfortunately, there is no one correct answer. There are too many factors that enter into this equation, many of which have been voiced in other responses to your quandary. Sitting down with an experienced professional is certainly the best way to look at the whole picture in order to make a very difficult decision. I too am a Certified Distressed Property Expert, having earned that designation early on, several years back. If you would like to communicate either via email or telephone, feel free to contact me. I would welcome the opportunity to help you sort this out in order to make an informed decision. I wish you the best of luck with your new job in any event!
Laura Jaffe
Jaffe Realty Group at Keller Williams
0 votes
Sandra Gold, Agent, Wellington, FL
Tue Aug 21, 2012
Dear Duke,

I am sorry to hear you are having difficulties with your home, however renting might be a solution for your problem.
Depending on your property you have to consider what your rent income versus expenses would be and if it would make sense to rent the property.

I would recommend you meet with a real estate professional to discuss your options of renting versus selling based on your home evaluation.

There are several options available at this time which may work for you.

If you have any questions, please feel free to contact me at 561-860-3321 or via email DestinationDreamHome@gmail.com

Sandra Gold - Realtor
The Infiniti Group International
1 vote
wrightrealty…, Both Buyer And Seller, Wellington, FL
Tue Mar 6, 2012
Dear Duke,
Here is my non-agent answer.

Not knowing how old you are but at the same time being irrelevant. The Real Estate market is not "coming back" We are on our way to a new reality of lower more affordable home prices. What we are witnessing now is the removal of the artificial boost in home values due to years of rampant fraud throughout the housing industry. As lending standards continue to tighten over the next few years from lenders realizing that the next leg down in values is on the way and need to protect their loans, you will see the lifeblood (easy credit) getting squeezed to a trickle.
Rates are just about as low as you can get at under 4 %. Even so, the prices are still inching downward. As those rates start to increase in years to come, you will see the economics of owning the property become less attractive. And for those who say rates will stay low, I know you are out there! But keep in mind that the ten year treasury influences long term MTG rates just as much, if not more than the Feds prime rate. And Treasuries are going to suffer the same fate that Greek bonds are, eventually, not right away but it is brewing.

I think we are on the cusp of a return to normal in housing prices. Where prices would have been without the 25% to 40% fraud induced ramps in values year over year. When we were living in the bubble (or better described as a Ponzi) it feels great! Long live the bubble when you are in it! But try as they may, the Fed cannot reignite a new fake ponzi. Everyone (lenders, Fannie Mae, Freddy, pension funds) are all looking for a way out of the Ponzi that they got caught short handed in. Inflation is running at 8-10 percent not the 2 to 3 % the FED suggests (see Sysco food dist conference call). Real incomes are shrinking in inflation terms.

My advice, talk to attorney first, then a good accountant. Once you have become educated and well versed and know the few adverse affects you may face personally, I would suggest you stop paying the mortgage.
With a good atty, you can plan to have the home rented for the next two to possibly three years while going through the process of getting a modification. If you get a mod, great. Now you will have a 1% +- mtg to pay on. If you don't get a mod, fine also, you have still done the right thing by protecting your future and safeguarding your personal finances. And don't feel bad about this, sometimes things just don't work out, and that's OK!
That why there are provisions in the loan that covers default, the banks understand this is a possibility as well. You are not doing anything sinister or evil. You financial future could be at stake so take wise steps, whatever those may be.

Do the right thing and consider to stop paying. Don't short sale the property unless you get in writing from the bank that there will be no deficiency posted (1099-c) to you.

Good luck my friend.

You non-agent truth teller, Chris
1 vote
Renee Hasak, Agent, Wellington, FL
Sun Feb 19, 2012

That is a great question and one we are finding many homeowners in Wellington are being faced with on a daily basis. I wish I could say there was an easy solution that fit everyone's needs, but that just is not the case. This is a huge decision and I have handled this same situation for multiple homeowners in Wellington where I work as a Realtor and have resided for the past 17 years. The Wellington market suffered an especially hard hit because property values were so artificially inflated by investors. While we are thankfully seeing some stabilization in values now, its going to take many years before we see any significant appreciation. As you mentioned in your question, by waiting and renting the property you would continue to gain equity whether or not you see any marketable appreciation.

Here are some questions for you to consider prior to meeting with anyone.
1. How much money do you need to get from the rent to cover the mortgage, taxes, Hoa dues, lawn care, pool care, insurance, and a repair account?
2.Do you need to cover all expenses or can you get by with just covering a portion of these expenses?
3. While renters are checked out thoroughly prior to renting, there are no guarantees and damage may occur. Just be sure you are willing to take that risk. Some people realize they are not willing to do that.
4. Are you able to come up with the difference in what you owe and what you may get for your property in a sale- If you are able to do this- you can sell your home and come to the table with the extra funds. If not, the bank may work out a promissory note. This is a way to save your credit.
5. Another option would be a straight short sale where your credit would be affected.

I am a certified distressed property expert and handle rentals, short sales and foreclosures. I would be happy to sit down with you and go over more of this in detail. I would also recommend speaking with your accountant .

Please let me know how I may be of assistance. I wish you luck in your new job placement.

All the best,


Renee Hasak
Westwind Realty
Certified Distressed Property Expert
Web Reference:  http://www.hasakhomes.com
1 vote
Evelyn Suarez, Agent, Wellington, FL
Fri Jan 9, 2015
As the real estate market has changed in the past year, there are additional options that you might want to consider. One being that you may no longer be underwater. As a Certified Distress Property Expert (CDPE) feel free to call me to get answers to your specific situation.

If you want to see what homes are currently selling for in Wellington click on this link

Evelyn Suarez
KW Wellington Realty
0 votes
Morrie Finke…, Agent, Lake Worth, FL
Fri Oct 12, 2012
Dear Duke,
Unfortunately there are a lot of families in the same boat as you. Their ship is sinking and sinking fast. Like one other realtor has told you there really is no right or wrong answer. Rentals are very hot right now and may or may not be the way to go. I don't know what shape your house is in or the location you are in that might have a lot to do with your decision.

You could always try to short sale it while you are renting it out. Without knowing your whole situation this is the best that I can help you.

Feel free to call me at 754-234-0637 or email me at fsun365@aol.com

I hope you get what you need to get going.

Morrie "Moe" Finkelstein Realtor
Tropical Springs Realty
0 votes
marc jablon, Agent, Boca Raton, FL
Sun Feb 19, 2012
If you have a home in Wellington and you want to rent it, you will probably find a tenant easily...as long as your rent fits within market range. You may want to talk to your Wellington Realtor and find out what homes in Wellington in your area will command in terms of rental.

If the rental rate is sufficient to pay your mortgage and taxes, then you will be able to remain current on your payments. However, if your Wellington home is not going to get enough rent to cover expenses, you will have to decide how much expense you are willing to carry above the rent you receive.

Based on prognostications about the South Florida real estate market, you may have a long time to wait to gain equity on your home in Wellington. Without knowing how far underwater you are, it is impossible to suggest how long you may have to wait, or how much you would need to charge for rent in order to start moving into a positive financial position with your Wellington house.

However, if you have already checked on rental rates and they will keep you at least current on payments, then you are wise to rent elsewhere. Because if you short sale our property, you will suffer a credit hit, and you will not be able to obtain a mortgage to purchase a new property for at least 2 years.

You may want to talk to your lender about the HARP 2 program and see if it can be of any help to you.

As for renters, some are very good, and some are not so good. The only way to find out is to check their rental histories as thoroughly as you can. Make sure you get a security deposit equal to at least one month's rent, and check your property periodically to make sure the renters are keeping it up.

Marc Jablon, The Jablon Team
RE/MAX Complete Solutions
0 votes
Alain Picard, Agent, Puyallup, WA
Sun Feb 19, 2012
In my opinion if you can rent your home out for more than it costs you per month to keep it than you should do that and sell it when things get better which could easily be a couple of years or more.
0 votes
Jim Simms, Mortgage Broker Or Lender, Louisville, KY
Sun Feb 19, 2012
I like your plan, honorable, hope it works out well for you.
0 votes
Bob Brubaker, Agent, Lake Worth, FL
Sun Feb 19, 2012
You need different perspectives here . One major consult should be with
a Real Estate Brokerage that actively Rents and Manages
Rental Properties in the Wellington area. They can advise on
proper pricing and Projected Marketing time. Their fees should be
calculated into your projected expenses. They should be equipped
for screening,renting,maintenance needs!
Second consult should be with your lender to see what can be done
about a " streamline "re-finance to lower the payment . The goal
being to cut expenses for better income/expense margin.
Third Consult should be with a Real Estate Attorney to advise
on any Landlord /Tenant legal "exposure" to look out for!
Good professional information in hand- Execute Your Plan! Life is
too short to be "put on hold".

Web Reference:  http://pbc-realcam.com
0 votes
Yolanda Ulib…, , 33414
Sun Feb 19, 2012
Hello Duke: "Being under water" is a broad term. One can be under water by $10K,$20, $30K or hundreds of thousands of dollars. There is no right or wrong answer to your question, it is just a very broad question which needs specific knowledge of the situation before one can give you a good answer. Other agents have responded from one point of view but I think you need to sit down with an experienced, knowledgeable agent to review your specific situation and based on that, determine which your next step should be. The market is moving and there is low inventory in median price ranges but prices are still low. The damage done to the RE market was way too "deep" so it will take many years to recoup. Therefore, unless you are willing to wait for several years until the market rebounces, you may have to make some decisions before you make your move. Also, If you move and leave your home behind until the market comes back, you may have to put your life "on hold" in your new City because you are hanging on to this home.

Let us get together, under no obligation, and let me learn about your specific situation so I can direct you in the right path for the best solution. As a top producer and expert Realtor who works the Wellington area daily, I know I can be of help.

Call me and let us schedule a convenient time to meet.

Yolanda Ulibarri, P.A. CDPE
Keller Williams Realty Wellington
Recipient of the Double Gold Award for Production in 2011
0 votes
Teddy Jagess…, , Wellington, FL
Sun Feb 19, 2012
As long as the rent covers the mortgage payments taxes and insurance and HOA if there is one you shoud be fine. Just make sure you relly screen the tenant. Being upside down you can contact a lender about refinancing with the new HARP 2 program just recently enacted for underwater homeowners like yourself. But this will only help to bring your mortgage down and also may entail principal reduction in certain cases, as you are relocating this will serve to make your spread between payments and what you can lease for more comfortable. Leasing is currently more expensive than buying
0 votes
Annette Law…, Agent, Palm Harbor, FL
Sun Feb 19, 2012
The correct answer truly depends on your situation. This analysis must consider your longer term goals. Not to be ignored will be the prospect of how the real estate market in your homes location is positioned to recover. All of this must be evaluated to alllow you to realize the long term consequence of a decision made today. Your tax adviser, attorney and employer will all play important roles.

The biggest 'red flag' involves renting the home. You still own it, you are still responsible for the mortgage. This will have a significant influence on your ability to purchase a home (financing) in the future. You have many options, the one best suited for your situation only surfaces with a bit of investigation.

Some options:
1. refinance
2. rent
3. Lease/option
4. Sell
5. short sell
6. (can not be mentioned here)
7. Clean up with end game strategy.

If you need further discussion. give a call.
Annette Lawrence
ReMax Realtec Group
Palm Harbor, FL
727. 420. 4041
Web Reference:  http://www.MyDunedin.com
0 votes
Fred Glick, Agent, Mountain View, CA
Sun Feb 19, 2012
I suggest that you refinance the house. There is a new program called HARP 2 that does not care what your value is.

This way, you can get a lower rate, making it easier and then you can rent the place.

I am licensed in Florida and can help.

Fred Glick NMLS #133975
U S Loans Mortgage LLC
Web Reference:  http://usloans.com
0 votes
Stephanie In…, Agent, Ft Lauderdale, FL
Sun Feb 19, 2012
Hi Duke,

This is a tough market for many homeowners that have lost equity in their homes. The good news is that rentals are on the rise in south florida and we can assist in helping yout determine what your home might bring in as a investment/rental property. Pleaes just let me know what community your home is located in along with the number of bedroom(s)/bathroom(s) and once we have this information we can give you a good idea of the rental income that your wellington home may produce for you.


Stephanie Infantino
REALTOR® & Team Manager
The Tino Team
Access USA Realty, Inc.
Direct: 561.504.2301
Fax: 888.354.6892
0 votes
Scott Godzyk, Agent, Manchester, NH
Sun Feb 19, 2012
The pros are you will not take a loss on teh sale, can save your credit while your mortgage is being paid. The risk is if you get a bad tenant who does not pay or trashes the house. the key is finding a good tenant. Good luck with your move.
Web Reference:  http://www.ScottSellsNH.com
0 votes
Diana M. Har…, Agent, Wellington, FL
Sun Feb 19, 2012
I would be happy to help you find someone to lease your current home. I have lived and worked in Wellington for more than 25 years and know your market well. I would be happy to email you Rental Comps so that you can see what your home may rent for. Just call or email me and I will be happy to send that to you. However, if you are relocating out of the area, you may qualify for a short sale on your current home. If this is something that you would consider and like more information on, I would be happy to talk to you about this as well. I am a Certified Distressed Property Expert and can walk you through this process as well. Just let me know how I can help!

Diana Harrell
Integra Realty Group Wellington
0 votes
Ann Ryan, Agent, Doral, FL
Sun Feb 19, 2012
Pros- You won't have to sell when property values are relatively low.
- Your credit would take a hit if you short sell, this would prevent that.

Maybe - You may collect enough rent to cover your mortgage and expenses (clearly depends on your mortgage payment and expected rent).

Cons - You do run a risk that the renters will trash the place (low, if you screen correctly)
- Your tenants may drive you crazy.

If you contact me, I'd be happy to run 1) comps on selling your property in the current market, 2) rent prices in your neighborhood, and 3) average days on market before rental. You should plan on painting, or touching up the paint in the interiors to help make the property more marketable. Also, try to tone down any "style" choices, from overly pink little girl's rooms to faux finishes.
0 votes
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