In theory the plan sounds like a winner. Can't get the price you want for your home? Why not rent the property for a year or two? Make enough money to pay the mortgage, start a savings account, and have a enough left over each month to cook the family carne asada. Let's examine why renting may not be a viable alternative.
1) Rental rates are governed by the same market conditions as selling-- Folks will only pay what the market will support. "We need enough for..." has nothing to do with what real people will pay.
2) Have you shared the "good news" with your insurance company-- Our insurance friends get a little jumpy when you start talking about leasing your primary residence. Why? Do you remember how you treated that apartment back in college? Renting will be "our little secret" might not hold water if you need to file a claim.
3) Trust your renters, but verify-- Renting that Savannah bungalow while you are riding the trolley in San Francisco is not wise. Plan on checking up on your property once a month, or pay someone to do it.
4) Hey buddy, can you spare five thousand dollars?-- "broke-thirty" is a terrible time to open ANY business. Will you have the funds to replace big ticket items with little notice?
5) Sorry about your deposit, my Oldsmobile needed brakes-- Most landlords require a security deposit. These funds help protect the owner against renter damage to their property. But what happens if the owner can't come up with the deposit at the end of the lease? Tell Judge Judy Doug says hi!
Rental property is best left to the professionals. While people do make money, it is not for the faint of heart (or wallet). The best course for most home owners remains the outright sale, even if the seller has to bring money to the table.
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