There are a few situations where you might feel you need to sell your house and then rent it back. Not always, but many times it is because you need money and you cannot refinance your property to get the equity out of your home. Selling your house and leasing it back also comes with the positive side that you no longer have to maintain it. You are the tenant, so the landlord will typically pay for typical maintenance issues, and where applicable, homeowners associations fees. The opposite side is that you become the tenant where they can raise your rents when your lease is up. Let us go over a few options that can help you free up your home equity.
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Real Estate Investors Who Buy Houses and Lease Them Back
There are a few investors who specialize in buying your house and renting it back to you. They are designed for short-term and long-term leases. Some even allow you to buy your house back if you end up wanting to buy it back. One of these programs will give you a certain portion of your home equity upfront, then rent it back to you, and then you go buy your new house in a high seller’s market with no contingency offer. Then, once you move into your new house, you sell your prior house to collect the remaining available equity in the home after the transaction fees.
Another great option for a sell and rent back reason would be knowing you need to move soon enough, but no definitive date, but you want the freedom of easier mobility. Real estate in some markets can take a while to sell, so if you know you are going to be needing to move and need more flexibility of time in your house, you could sell your house then rent it back while waiting with favorable terms for your mobility needs. There are several other needs for a rent-back in the real estate market.
Sell Your House
Selling your house can be a robust experience where you could benefit from a professional real estate agent. A skilled and well-experienced local real estate agent should have different rent-back programs available for you. Typically, they will be with real estate investors. However, there are homebuyers who do not need the property until the following year who would gladly lease it back to you for a long-term lease. Besides the long-term rent-back option, there are home sellers who need a short-term lease-back option to allow them to close on their next home and then move out after.
Real estate markets are frequently changing, so this can impact your needs. Some real estate markets might not have the benefit you selling your home and then staying in it. In a market like this, you will get stuck either delaying your closing or having to do a double move–meaning moving somewhere temporarily, maybe with a friend or family member, and then moving again once you find your next home. This can get costly with storage costs, and then the added stress of simply moving twice before you are into your next home. A skilled real estate agent will be able to give you options for buying your next house while selling your current house.
Real Estate Experience
When you want to sell your house, you will need a skilled agent on your side. Not all real estate agents are equally skilled and experienced. The fact is, not all real estate agents have investors to buy your house and lease it back to you.
If you want to sell your house fast, you will need to let your agent know. A great agent will dive deep into your needs, wants, desires, and build a plan for selling your home to help accomplish this. Selling real estate is not as easy as most people think. In conversations with people, they think it is a linear experience where an agent is just an agent and that they are all the same. If they were, then 7% of the agents would not sell roughly 93% of the homes for sale.
Real Estate Market Value
The term market value can be subjective. Prior to selling your home, you will want to know its value. A skilled agent can help you with this, or you can get an appraisal done ahead of time. Your house value can change based on how you desire to sell it. A real estate investor is not purchasing a home for pleasure. They are purchasing it for a return and they are assessing things based on the time it takes to re-sell a house and what market rents are and how quickly would it take to rent a house.
Local and national economics and even international economics can impact the value of a house. Besides that, governments can change how they treat long-term capital gains, which can send investors to buy real estate, or the opposite– to run and sell their houses.
New Home Construction
A great reason to do a leaseback is if you are building a new house. You might desire to sell your current home and rent it back while waiting for your new home to finish because some builders may require your home to be sold or under contract in order for you to close on your new build. The other option would be to sell your house to a buyer who will give you a small post possession. You would just time your house for when to put it on the market and when the closing date will be. You will want to make sure your agent is putting in the right language in your purchase contract for your current house you are selling.
You could also sell your home to a cash buyer who wants to re-sell your house who will give you flexible closing dates. There are investors who buy homes to turn around and sell them. These home buyers typically buy the house with enough margin to turn around and sell it for a fair profit. They will give you a cash offer for your house, and it can be a raw number or it can be layered with different numbers. If you sell your home to one of these cash offer companies, make sure to look over all of the details from the investor.
Summary
As you can see, you could have several home sale options when it comes to selling your house. You can get an investor to buy your home and re-sell it, or you get an investor to buy your home and rent it back to you to allow you to buy your next home smoother. You can also have your home sold and do a small post-possession agreement. It is best to have a skilled professional agent to help you thru these options for you when you sell your house. A skilled agent will help your home selling experience go a lot smoother, and hopefully make it seamless. When you sell your property and rent it back from an investor or buyer it allows you to do one move vs two when you can own two properties at once.
If you are a realtor in need of more articles on this subject and others then visit Dorrmat to find more great ideas and resources.
