Question
Rent, Short Sale, or Stay?
My Husband and I bought a home in rural Northern California August 2007 for $265,000. Right now, our exact model sells for $120,000. I am so, so, so tired of the 60 minute commute each way and want to move, badly. Our current payment is $1300 (includes taxes and insurance) and we could probably rent it out for $1200 per month. If we rented a house either near my work or my husbands, we would save ~$400 in gas each month and our rent would be about $1500, so it'd almost be a wash. The main thing to me is improving our quality of life with more time and being able to go grocery shopping with out a commute! Really, a short sale leaves a bad taste in my mouth and I don't know that we'd even qualify. WWYD in my situation? Am I just being a brat and should wait out the market? Also, if you have a guess at when CA homes will see positive equity, I'd like to hear it. Thanks! I know California will come back, it's just a matter of when though, and I don't want to be stuck here for 10 years.
1 month ago - 3 answers
Best Answer
Chosen by Asker
California will come back. wait it out somehow
by David Z
1 month ago
Asker's Rating: 
Other Answers
Based on what you wrote, you can still afford to stay in the house so don't even consider the short sale as an option. Since financially you can afford your mortgage you wouldn't even qualify anyway. Between the two options of rent or stay, I would be nervous about renting out my house to strangers. I generally don't trust people especially to take care of property that isn't theirs. We just bought a house that the people never took care of and they owned it, who knows what they would do to someone else’s home. However, people do rent their homes successfully so it is a reasonable option to consider. You should take a serious look at the responsibilities that come along with being a landlord. Make sure you check that you can even rent out your home as some mortgages require it be your primary residence for a certain number of years. If that's all set, then you should look at the liability costs and who would maintain the property. Can you afford to make repairs as they happen since you can't put them off with tenants living there? Will you hire a management company to handle the tenant and communication or do it yourself? Will you have the time to drive to the house whenever they have an issue? The most important thing you have to look at is if you will be able to afford your mortgage payments (including tax and insurance) and your rent should you have months where no one is paying rent. This could happen when you have no one renting or tenants who don't pay like they should. This does happen more then you would guess so make sure you have money in reserves for those situations. Being a landlord is a big responsibility and you will come across less then perfect tenants. If you do decide to rent out your home, I would recommend only signing short term leases for your own rental in case things don't go well and you have to move back to your current home. Good luck. Brit
by Positively Pink- 1 month ago
A short sale should be as a last resort as it lowers your credit score dramatically. It seems that renting would be the best option because staying clearly also wastes a lot of money on gas. If you plan on getting another house, a lowered credit score means a higher mortgage rate, which can potentially cost you thousands of dollars over the course of the loan. You should probably look into renting it if you really want to get out of the house. Even if the rent money is a little less than the mortgage per month, it may still be a better choice than a short sale. Also, keep in mind, in many short sale situations the sellers are still required to come up with part of the cash. Renting it for a year or two may mean that housing prices are better by then, and then selling it may be a better option at that point.
by Quicken Loans- 1 month ago