Should you rent it or leave it vacant when your behind on the mortgage

The question remains; if you move out, should you try and rent it or leave it vacant??? if you were to poll 100 agents you may get split responses on what should be done. Of course; ultimately it is your decision as a home owner but there are some things you should consider either way. Lets review some of the pros and cons of each option:

Allow friends/family to stay in the home while you relocate:

Pros:

• The property is being occupied by someone you know and should minimize the possibility of someone breaking in and causing damage to the property.
• If it's someone close to you; it allows you to move on and have the place in the hands of someone you trust and allow yourself the chance to periodically check on the house to make sure it stays in the right condition.
• Vacant homes usually deteriorates a little faster because of the stark climate changes of no heat or air condition during the seasonal months. Cracked, peeled and chipped paint are expected in vacant houses and if you do not winterize a home you run the risk of frozen and/or busted pipes which could cause flooding or sever damage to the property's heating and water systems along with creating mold and other problems that water damage can create. so someone staying there keeps a close eye on the property and hopefully allows the condition to stay the same while you decide your next move.

Cons:

• You should disclose the situation to the occupant because remember the foreclosure letters and phone calls will continue all the way up to the day of sale and you may not want this personal information known by too many people. The Lender has your address and phone number on file and will attempt to contact you as much as they can in an attempt to reach a resolution.
• No one will ever care more for your home than you do. So don't be surprised if the occupant does not maintain the home in the proper condition; which could affect the properties marketability. Hopefully your home is with someone responsible, i 've seen cases where homeowners left friends or family in their homes and those homes were turned into illegal places (drugs, wild party's etc...) and the home owner was found liable because remember it is your home.

Find a tenant & Make some cash:

Pros:

• You now have income coming in on a place where you are not currently paying the mortgage so all the proceeds are going directly in your pocket.  I cannot truly say that this is correct or even legal but nevertheless; home owners everywhere are considering this option.

Cons:

• Be careful with the lease you provide this tenant (I hope you secure a lease). I had a home owner whom we had the listing to sell give a tenant a 1 year lease despite my instructions to supply a month to month agreement and no one would bid on the house for a year because the tenants lease had to be complete before a new occupant could take over. If your Agent is aware of the area and what kind of buyer will be shopping for a home similar than yours then you may have just eliminated your buyer pool with one stroke of the pen. Just remember if your homes primary buyer is an owner occupying buyer, then it will be difficult, if not impossible to secure a buyer if they have to wait 5 months to move in.
• Also, you can never be certain on whether or not the occupant (tenant) will maintain the home in good condition or they might not be too cooperative with showings if you decide to list it for sale.
• Depending on the way your original loan was written, or the type of your loan you have (FHA, VA, CONV) you may be in violation of your original loan if you rent the property as it would become an investment property and not a primary residence. (check your original loan docs & with your lender for more info).
• In order to rent it you will have to alert the tenant of the properties status and keep certain services running such as Water, Sewage and garbage pick up which may be expenses you were not considering. Also, what about repairs? if the roof goes bad or the Plumbing becomes non functional mid way, it would be your responsibility to fix the problem and you may not be able to financially make that happen. You have to remember you are now a Landlord and the tenant does have rights.

Walk away and Leave it vacant:

Pros:

• If secured properly; you should be able to save some money by not having to pay for usage of utilities and housing expenses. Not to mention it may make showings much easier for Real Estate agents if its listed.
• If your attempting a Deed in Lieu then securing the property and clearing it out may just be what your lender wants in order to accept the agreement and allow you to walk away.

Cons:

• How secure, is secure? burglars can find some pretty creative ways to break into a home and the damage that can do in a single night can cost thousands.
• Depending on who services your mortgage you may not be eligible for some incentives such as Bank Of Americas sellers incentive program (without going in too deep) the bank can offer sometimes $3,000.00 or more to help with moving or relocation expenses.
• Vacant boarded homes can be an eye sore to an area and will alert all of your neighbors that there is a problem with the house and affect property values in the neighborhood.
• Just because you walked away that doesn't mean that you are not responsible and liable for the property. If a vacant home burns down without insurance, the home owner is still liable for any damages or injuries incurred as a result. So walking away does not mean you are free of responsibilities.