When all else fails...Rent it?

One of the first properties I got to manage was a cute little condo in Virginia Beach. It was owned by Justin, a military personnel who bought at the height of the market just before the crash in 2008. Right after purchasing it he began to make improvements to the property. It was completely adorable and he had take such good care of it. When he called me in 2014 to sell it, I had the unfortunate job of informing him he was "under water" and he owed more on the property than it was worth. This actually happened a lot to me that year as most

sellers who had bought in the last 10 years were in this same boat, lucky to break even. (The average cost for a seller to sell is about 10% of the home sales price.) In Justin's case he was military and was being relocated to Texas and had no choice but to move. Since the time he bought the condo he had gotten married and had a baby. Moving to Texas to start school on a medical path, he would be taking a significant pay cut and he did not want to rent it for fear it would sit vacant and he would be responsible to make the mortgage payment. He was willing to sell his truck to bring the almost $20,ooo to closing for the loss he would take if it sold. I pleaded with him not to do that. I was confident the place would rent quickly and if he could hold on to it, maybe the market would eventually turn and he could at least break even. Besides, even if it did sell the first day on the market he would ultimately be responsible anyway for the mortgage payment until it closed which typically is about 2 months and if it didn't sell fast he would be shelling out even more. Since then it has been constantly rented and with good tenants. So far, I think he is happy with the decision.

Renting can be a risk and you have to be prepared for anything. You still own the property and are responsible for its upkeep even while its being rented. A few things to consider before renting...

1.) Set aside a chunk of money incase of vacancy.

2.) Set aside a chunk of money for unexpected