Should you Sell, or Turn Your Home into a Rental Property?
Real estate owners have many reasons to move. Some of the time its out of necessity, other times its simply to move into a more desireable home. In the current economy, and with mortgage interest rates as low as they are, the best long term financial decision is probably to rent a house out rather than sell it at a steep discount.
With today's mortgage interest rates as low as they are, rental rates generally exceed mortgage payments, especially if you've owned your home for a little while and have some equity. By renting out your hard to sell house, not only can you continue to build equity as your house gets paid down, but you might also be able to generate extra cash flow when rents exceed payments.
Plus, as the years pass by, your property value, and your rental income will increase with inflation. Your fixed mortgage will stay the same, and eventually, it will be paid off. By owning rental real estate the renter pays the expenses for a long term asset.
Home loans for primary residences are better than rates for properties purchased specifically for investment. By living in a home, and then converting it into a rental property, mortgage terms are more favorable.
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