Own or rent in retirement?
25 days ago
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fyi: MSNBC article; rent vs own
Comments (19)"You might do better living in these areas:" Why, because places where there have been rapid increases in valuations are less likely to have rapid descents? Here's a quick clip from a recent Business Week article: While a 25% decline is unprecedented in modern times, some economists are beginning to talk about it. "We now see potential for another 25% to 30% downside over the next two years," says David A. Rosenberg, North American economist for Merrill Lynch (MER), who until recently had expected a much smaller slide. Shocking though it might seem, a decline of 25% from here would merely reverse the market's spectacular appreciation during the boom. It would put the national price level right back on its long-term growth trend line, a surprisingly modest 0.4% a year after inflation. There's a recent model for this kind of return to normalcy after the bursting of a financial bubble. The stock market decline that began in 2000 erased most of the gains of the boom of the second half of the 1990s, leaving investors with ordinary-sized returns. I just noticed that Business Week has the Feb 11th issue titled "Housing Meltdown". I think I'm going to go pick up a copy....See MoreRent to Own Offers? What Is Business Model?
Comments (5)This is a scam frustrated realtors use to take advantage of a seller. I own many rentals and I get these calls a lot. What they do is make you sign a commitment to rent and sell your house at any absurd value!. Then they advertise the house hoping someone will bite. They will rent your house for "x" dollars while pocketing the down payment(which what they are after(5-10 percent). 100 percent of the transactions never materialize and you get your house back after two to three years in a worst condition. The real stuff is in the fine print that you will get your money if the house sells after the rent to own period is over. I have never seen it happen. They will ell you that they have a database of people who are looking for RTO and they are closely working with them to get their credit on track etc. All bull. I find it amazing people who have no idea about things start giving advice like sublease stuff etc!!...See Morerent to own pitfalls?
Comments (12)The renter is often at more risk than the landlord. the renter is betting you will be able to deliver clear title at some future date. You could mess up ad have an IRS lien attached . Have separate contracts drawn up for the lease and have him give you a non-refundable deposit on an option to purchase. The option often sets the price and terms of the purchase. The option price is to give him an incentive to maintain the place (or at least not do any excessive damage) and you the money needed to bring it back to salable condition. From your view point, more money is better. He of course would prefer less. Your risk is for a wild price increase during the option period. I have sold a couple houses as actual rent-to-buy type contracts. Both went to professional level folks with medical related bankruptcies. Both worked out well. I gave a rent credit, and the option price had an 'increase clause'. Both couples got back on their feet quickly and exercised the purchase option in less than 18 months. Both behaved far more like owners from the get go, likely reenforced by making them responsible fr AL maintenance during the option period. Without needing to set aside rent money to cover maintenance issues, the credit they got did not really hit my finances. Make sure you have a very good RE attorney draw up the agreements. This post was edited by brickeyee on Sun, Jun 2, 13 at 8:39...See Morelease/rent to own house
Comments (13)IMO, you are better off reducing your asking price and focus on selling that home asap. With renters (even rent to own), you also get hassle and you still have responsibility of that home and things will get old and break even if you have perfect renters. And, the renters usually get precedence over you since you want to fix their things quickly, which makes you feel like a second class citizen. For example, you will have a huge TO DO list for items related to your new home. But if the dishwasher fails at the rental home, guess what just got moved to the top of the list...pronto? You drove by the home and they have 3 cars in the driveway and a 4th car parked on the lawn. Oh my, how do you handle this if the lawn parking wasn't in the lease? They have a dog now but they say it is a friend's that they are watching. Oh no. It looks like part pit bull to you and your insurance says no pits, what do you do? As the other home ages, the roof, water heater, carpet, furnace all age and eventually break and need replacement. The interior and exterior will need repainting after a few years. Yardwork and weeding and fertilizer, etc from renters is usually minimal, so your hard will likely deteriorate gradially and you might need to do this yourself again in order to sell it. You would need to buy homeowners insurance specific for renting the home. Chances are very, very high that the renters will NOT buy it and then you will have to coordinate them moving out and then you focus on selling the place again, but only after you repaint, touch up, clean the home after the renters left. I strongly suggest that you focus on selling your home. Having responsibility for 2 homes is not fun and can be stressful and costly. Even if one home is brand new and even if the renters are good. You will still have bills to track and pay for both homes...insurance, taxes, mortgage, maintenance. It isn't worth the hassle...life is too short....See More- 25 days agolast modified: 25 days ago
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