As you are reading this article, you may consider that any time real estate is involved there is also the potential for making a far reaching mistake with the biggest asset currently under your control – the home. At the same time, what is an asset to many, to others is an albatross around the neck that threatens to gradually choke out any semblance of fiscal health from their bank accounts, damaging the credit profile in its wake.

How to sell property and rent it back without being taken to the cleaners is the kind of tutorial you will be wise to peruse before deciding on any course of action. In the best case scenario, you will follow it up with an appointment with a credit counselor who will also give you some advice to help you make heads and tails of your finances without having a direct stake in the outcome of your decision. When seeking fiscal advice, impartiality is the name of the game!

1. Any contemplation about how to sell property and rent it back must begin with an honest assessment of how much your property is currently worth. Taking into account comparable home sales in your neighborhood, the home’s overall condition, appearance, and also curb appeal, what do you think you could get for it on the open market?
2. How much does a home such as yours rent for in your area on the open market? This does not take into consideration whether or not a landlord is extremely motivated, but it assumes that a professional management company is overseeing the rental of a piece of real property.
3. Compare your monthly mortgage payment to the monthly rental payment. Which is higher? If it is the latter, you might need to seriously consider the move. If it is the former, then you might have something here and it is time to press on.
4. Since any such transaction will require contracting with a private investor or investment company specializing in this kind of arrangement, you will find that you will most likely have to pay for the privilege by drastically reducing your home’s asking price. As the investor will engage in a cash offer, you stand to save money by not having to wait out a potential seller whose primary residence sale is directly tied to your home’s purchase. Thus, the reduction in price might be worth the peace of mind.
5. Hammer out the rental agreement and ensure that the terms are what you want, not what you settled for. In other words, you will come out ahead if you are permitted to rent for a period of time that is suitable to you and if you will not mind moving when that time is up.
6. At the same time, you will have chosen wisely to sell your property and rent it back if during this transaction you will have paid off your mortgage and maybe even gotten out a bit of left over equity cash that you will now be able to use to either put down on a future home or apply toward some bills.