You’re thinking about selling your house, but you may not be quite ready to let it go, or, when you run the numbers, you may not be able to sell it for as much of a profit as you may want.
Have you considered leasing your home instead? Giving you the opportunity to buy another home and still retain ownership. You can own your home for five years, occupy the home for two years, rent it up to three years and then sell it without paying capital gains taxes.
Markets improve, often there aren't enough homes available for purchase in the areas where families want to live. Relocating families may have a home to sell in another area or they may simply want to try out your neighborhood before buying. They want to spend a year settling in and learning about the area.
The ideal time to lease your home is if you can rent it for more than you're paying in mortgage, taxes and insurance. You also need some savings that will cover months when the home isn't rented, as well as repairs that may come up.
If you want to buy another home, the debt on the home you already own won't count against you as much as you may think, and especially if you already have the home leased. The lender may add a couple months of mortgage debt to your overall debt picture to be on the safe side because many properties don't rent right away or there may be lag-time between renters. With good to great credit, you can get a low down-payment loan that doesn't require all your cash.
talk with a real estate professional To help you decide if leasing is a good idea He or she will have comparable for other rentals in the area, so you'll know how good the market is for homes like yours and how much you can expect to get for your home.
As the owner, you can decline a renter who does not have the credit rating, earnings, deposit money, or references that you require for a good renter. Your real estate broker can perform a number of background checks for you on potential renters including credit scores, rental and eviction history, criminal and sex offender checks, motor vehicle checks, and employment verification.
Your rental agreement should include penalties for late payments, as well as outline clear terms -- length of the lease, possession date for move-in; terms for extending the lease, fees for late payments, pets or no pets and so on.
Be very clear about what the renter is responsible for doing this will prevent disputes over who pays utilities. Make sure the renter also pays one month's deposit so you can cover the costs of cleaning, repainting and other make-ready steps. Last but not the least make sure your renter has renter's insurance.