With housing prices dropping there are a lot more real estate deals to be had out there and people who are in a good financial and professional position may be tempted to leap at these great deals. The problem – if they already own a home they may find that they’re property value has dropped and selling just isn’t going to rake in the money they wanted. Some of you may in fact find that you’re actually upside down on your mortgage.
This is not necessarily a bad thing as the rental market is still pretty strong in most areas and one solution to help you get your cake and eat it to, or in this case your property. You may not have ever expected being a landlord but turning your current home into a rental and purchasing a new home in this buyer’s market can be a win/win situation for you.
Before you decide to dive right in, talk to your financial advisor and see if you can swing the mortgage on both places. You’ll want to learn a little bit about the rental market in your neighborhood and what the going rate is for similar property. This will help you and your financial adviser determine your status and how much you will be approved for on the new home.
If you do decide to go this route, make sure you become informed on rental laws in the area, being an educated landlord will help eliminate possible future problems.