Need some advice please!

So here is my dilemma. I purchased a home back in Dec. 2005 that my family and I are currently living in. At that time we paid $125,000 which was a good price at the time. We currently owe $120,000 on the loan. Over the last three years we have put about $10,000 into the home by adding a fence, remodeling the kitchen, re-carpeting some of the rooms, changing out all of the lighting inside, painting, and doing any minor repairs that needed to be done. We also added a play area with bark and planters outside.

Recently I was offered a job with the Bureau of Reclamation that is a really great opportunity. However we are stuck trying to figure out what is the best course of action. We were contemplating selling the home but a Realtor is telling us that we could get $145,000 at most which would leave us with about $6,000 in pocket before finishing up some projects that need to be done. Plus homes in our area are sitting on the market for 81 days on average and I am supposed to start my job in a month.

We have also been contemplating putting the house up for rent until the market corrects itself and then sell but don’t even have the first clue of where to start there. Would it be wise to refinance to get the payment lower or not?

We are not sure what direction to go in because we really would like to purchase another home where we will be moving to but don’t know how having a rental will effect that.

Any advice would be much appreciated. Thanks in advance.

jk4138,

Read your newspaper want ads and call on local “For Rent” signs to figure out what the market rent is for your nice house.

Now figure out how much of your house expenses the rent will cover. Don’t forget taxes, insurance (Landlord insurance is usually less costly than Homeowners’), vacancies, maintenance, maybe property management.

If you are having to subsidize your house every month, then yes this will impact qualifying for a new home.

The fact that you CAN sell your house in this market is a positive. You may be lucky to get any funds out at all.

You will probably need to rent in your new location until you get the old house problem solved. This will give you time to settle into the job and learn where the good deals are in your new area. You are going to be okay once you get it figured out.

Good luck to you.
Furnishedowner

jk4138,

A lease with option to purchase could solve your problem. What you are doing is giving a tenant the chance to buy the house in a year or two, usually at a higher than market price. You can get an upfront option fee which is non taxable and you could use to move with. You normally get higher than market rent and the tenant takes care of regular repairs. The tenant plans to buy so usually takes good care of the property.

Good luck,
donrock