Basics of Property Management: Screening Potential Tenants
Things To Consider When Selling Your House If You Have Very Little Equity
Jesse Obrien
If you are struggling to make ends meet and are considering selling your home to relieve your financial woes, you may wonder if it would be worthwhile if you have very little equity in it. As you consider your options, it's best to start by looking at the amount of equity you actually have. This could help you determine the best way to handle this decision, and here are several things to consider as you decide whether or not to sell your home.
Could you make a profit?
The equity in your house refers to the difference between the value of the home and the amount you owe. If you calculate this and discover that you have no equity, selling your home through a real estate agent could result in having to pay money. This occurs primarily from the fees you will have to pay to sell the house. Most agents charge a rate of 6% to sell a house. This means that if your house sells for $150,000, you will have to pay the real estate agent $9,000. If you owe $145,000 on the house, you will have to bring a check to the closing for $4,000 to pay your agent.
Could you move somewhere cheaper?
The second thing to consider is how much you will have to pay to rent a place if you sell your house. Rental payments can vary tremendously by area, type of unit, and size, but you may discover that your current mortgage payment is about the same amount as rent would be if you moved. If this is the case, selling your home might not be a wise decision. If you keep your home and have to pay around the same amount, at least you would have something you own, and your payments would help reduce the amount of principal you owe on the home.
Is there another option?
There is another route you could take if you really want to sell your home if you have no equity in it, and this option is through a short sale. A short sale allows you to sell your home for an amount that is less than the amount you owe your lender. To use this method, you would have to talk to your lender to find out if they will allow you to do this. If so, make sure you fully understand how the deal will work.
Selling a home without equity can be difficult; however, you might discover that you have more equity in the home than you originally thought. To learn more about this, visit www.deeevans.com or a similar website.
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For the last several years, I've used a property management firm to help with my rental properties. One of the tasks that they handle for me is screening applicants who would like to move into one of my vacant units. Their expertise has helped me lower my tenant turnover and find people who want to stay with me for years. Part of the process is a tenant screening credit check. Before any further contact takes place, my manager orders credit reports from at least two agencies. That is enough to tell us if an applicant is a good financial risk. Assuming the references work out, I meet the candidate and make the final decision. If you own rental properties, let me tell you more about the benefits of having a property manager. I'm betting you'll find this type of arrangement will work for you too.