Please brainstorm this with me

General Real Estate Investing
1

I recently became interested in real estate investment and if I knew then what I know now, I would not have purchased the home in which I currently live. We bought it about 10 months ago, just as the real estate market began to flatten. The home is larger than the average home in my neighborhood (3400 sq. feet), fairly new, and in good condition. It is in a high growth part of town where there is a lot of development going on, both commercial and residential. In this area, there is a glut of inventory and we are in the foreclosure capital of the world.

My family may be moving within the year for career advancement reasons. I would hate to sell this house in this type of market as we would most likely incur a loss because of transaction costs.

Would finding a lease option buyer make sense? Our monthly costs are approx. $1600 if no repairs are needed. I went to RentClicks.com and found similar local houses renting for $1600 and less. I’m wondering if a lease option might give me the opportunity to price the house slightly higher than the market rate to wait out this downturn.

What should I be considering and learning to make a good decision? Suggestions for books to read or thoughts to consider are welcome and appreciated.

Thanks!

Topaz

2

You say you want to wait the downturn out, so then why not do a straight rental for the time being?
And don’t depend on RentClicks.com for setting the rent price. Do a more local analysis for an accurate read on your local market.
Finally, if you’re interested in learning all things regarding lease options, I’d recommend visiting The Naked Investor. Great info on the subject. Good luck.

3

Thanks! I’ll definitely check out The Naked Investor.

The only reasons I thought perhaps a lease option are (1) I thought it might be more attractive to a tenant, and (2) I thought I might be able to secure a slightly higher rent to decrease the possibility of negative cash flow.

I’m concerned that there are so many houses on this market, I’m not feeling confident I will be able to find a tenant. But I suppose I’m going to have problems whether I rent or try to find a buyer…I am never again going to buy a property without thinking about exit strategy first.

I would certainly do more analysis than rely on RentClicks, but thank you for the reminder…I’m totally new at all things real estate.

Topaz