This is a real estate market that many Atlanta sellers often turn to their listing agents and ask for advice. More often than not these are sellers that aren't as motivated as others, and are in denial on price. Their bet is that they did a half ass job o selling the home, did not want to make any of the improvements the listing agents suggested, and have come up with a novel way to avoid the pain of making a real decision. These are sellers that have an aversion for pain and risk. There solution? "What if we rented the home until the market comes back?" My answer would be..."that depends!" "depends on what?" the seller will ask. My answer, "If you are a gambler or not!"
The gamble in this real estate market will home and real estate prices hold or continue a gradual slide? No one really has an answer, but one thing for sure if you have your money in hand, you are ahead of the game. If you rent the property and rent it for more than two years and it was your primary residence you may lose your homestead exemption, US Tax exemption, and more. Also in many states like Georgia if you move out of state and rent your property for more than 2 years you are now subject to A non residency tax. The state will withhold 3% addition proceeds at closing for taxes. (Check with your tax advisor!)
The last portion of this is value. Suppose it takes you several months to find a tenent, and then finally secure a lease of up to two years...what happens to your investment if real estate values continue to fall? In the last few months of Atlanta real estate statistics home prices are now starting to fall.
The average price of Atlanta homes are dropping with the average price of condos & town homes in April '08 down 7.8% from April 2007's $ 8.2% for year-to-date, January-April 08. The average price drop in price for Atlanta single family detached homes are down 9.0% from April 2007 and 10.1% for year-to-date.*
Most new agents in the Atlanta area cannot bring themselves to be the bearers of bad news, but that is their job. In some areas the numbers are not bad at all, but there are plenty of statistics to back up the data. Sellers need to be realistic, and look only at most recent data from the last three months.
*Source FMLS statistics 4/2008
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Jim, unless you are forced financially to do so, my advice to anyone is to never lease out the property you are leaving unless you wanted to be a landlord all along. If not, don't do it. Thanks for such accurate updates on the Atlanta market.