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Leasing as an Alternative to Foreclosure

By
Real Estate Agent with Keller Williams Realty Lakeside

Leasing as an Alternative to Foreclosure

This is probably one of the most least-considered options for Homeowners facing Foreclosure.  It seems that when things become dire, Homeowners automatically begin to think "SHORT SALE" when they can't sell their home the "old-fashioned" way, because they owe too much!  Fortunately, there IS another option!

If you CAN'T pay your Mortgage, find someone else who CAN!  Hiring a Real Estate Agent to help you rent out your home is one of the easier things you can do to avoid foreclosure!  In lieu of their primary residence becoming a rental property (and secondary source of income), a Homeowner can downsize to make their situation less burdensome, thereby avoiding foreclosure!

It's understandable that a rental payment from a tenant may not completely make up for an existing  Mortgage payment, but it will, at the very least, reduce it to something more manageable for the Homeowner!  Not only this, but having a renter removes the burden of utilities and other miscellaneous bills for the home.  At the very least, it's a temporary solution until a more long-term one is presented!  And, as always, this is under the assumption that you have a reliable tenant!

But BE CAREFUL!  A Homeowner should NEVER sign a lease to a tenant unless they have secured another means of housing!  You would think this is common sense, but mistakes DO happen!

For the Homeowners that aren't privvy to the world of being a Landlord, there are Property Management companies that will oversee the maintenance of your property for you!  Of course, this will come with a nominal fee from every rental payment, but, again, it's all about reducing YOUR burden!  In my office, we have an affiliated Property Management department that will provide their services to Lessors for 10% of every rental payment.

Foreclosure is an UGLY thing, and it's something that EVERY Homeowner should avoid at all costs!  Be aware of your options!!  Consult a Real Estate Agent!!  They will help you decide the BEST course of action to take!!  Remember, in the world of Foreclosure, it's always a race against TIME!

Nor Yeretsian
Envoy Capitol Realty Inc. - Toronto, ON
Envoy Capitol Realty Inc., Brokerage Toronto

Good concept Damien , there should be alternatives, productive / positive options.

cheers

Nor

Apr 14, 2011 04:45 PM
Dennis Burgess
AmeriTeam Property Management - Mid Florida, FL
Orlando Property Manager and Realtor

Hi, Damien:  It's gone back and forth quite a few times in the past 10 years.  Folks would have a number of properties, then get scared and sell them off when the market went bad.  For a while, "unload" was THE word- not just A word.  Then folks crept back into things, and holding onto places was the thing.  Recent times have seen "short sale" become king because the owners just can't see the bottom of the market- like in a murky creek, you know there IS a bottom, but where?  Ironically, my business is primarily property management but I look to tell folks the truth- sometimes the truth means telling them it's best to rent, sometimes I tell them it's best to try and beat their neighbor to the top of the short sale list.  My best advice remains the same, though- if you don't HAVE to sell, don't sell and take $.50 on the dollar if it's not necessary.

Apr 14, 2011 04:55 PM
Jon Zolsky, Daytona Beach, FL
Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL
Buy Daytona condos for heavenly good prices

Damien,

Aren't you afraid of getting the situation worse? To all troubles that the homeowner is already up to the neck, s/he can add troubles with tenants. And if tenants stop paying, it will take time to evict, but now you are stuck with the house plus the property you rent for yourself

Very risky prorposition

Apr 14, 2011 04:56 PM
Wayne Johnson
Coldwell Banker D'Ann Harper REALTORS® - San Antonio, TX
San Antonio REALTOR, San Antonio Homes For Sale

Damien, This can work for some, but probably the majority of people who are in short sale situations in our area do not have a safety net that would make this a good situation.

Apr 14, 2011 05:06 PM
Kimberly Thurm
Berkshire Hathaway HomeServices Chicago - Naperville, IL
Broker / Relocation Consultant ABR, CRS, GRI, SFR

Hi Damien, Having a good tenant with a solid job and a great credit score can be a little tricky.  It's always best to have professionals in your corner.  Welcome to the Rain - Nice to see another Real Living Company here!!

Apr 14, 2011 05:13 PM
Dan Edward Phillips
Dan Edward Phillips - Eureka, CA
Realtor and Broker/Owner

Good evening Damien, good advice for home owners in trouble to review and consider.

Apr 14, 2011 05:14 PM
Damien Coles
Keller Williams Realty Lakeside - Shelby Township, MI
REALTOR® Extraordinaire

I'm hearing valid points from everybody!  I appreciate the feedback.  Of course, I'm NOT suggesting that this be the only option for Homeowners to consider.  There are SO MANY factors at play, and everything needs to be evaluated on a case-by-case basis.  But again, Sellers should know their options!

Apr 14, 2011 05:16 PM