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Ready to rent out your house?

Posted by Scott Van Voorhis March 12, 2014 03:32 PM

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Sellers who want to move up to a bigger house face a big problem in today's market.

Sure, with prices rising, you are more likely to get a decent price for your old home. But can you actually find something to buy?

With the inventory of unsold homes down as much as 30 percent from last year in some parts of Greater Boston, it's a huge problem.

That said, one way some move-up buyers have found to bridge the gap is by renting out their old house instead of selling it.

Nearly 40 percent of buyers across the country say they plan to rent out the house they own now instead of selling it, a new Redfin survey finds.

That takes off the pressure to line up a house in a hyper competitive market, racing against the clock so you have a place to move into before the sale of your home closes.

And it might not necessarily be a money loser, especially if have a great rate on your mortgage and live in a market like Greater Boston, where rents have been relentlessly rising.

Here's what one agent had to say about this trend in a Redfin blog post that details the survey.

I've cut and pasted an excerpt.

"Many of my homebuying clients refinanced and locked in a very low mortgage rate in recent years," said Redfin Baltimore agent Taylor Connolly. "That low rate, combined with a strong rental market, means they can charge more in rent than they pay in mortgage each month, so they are going for it," Connolly said.

"My family is in the same boat; when we move up this year, we plan to keep and rent out our current home."

But the benefit of renting is not just financial.

"Keeping their old home means they won't have to risk becoming temporarily homeless like those whose homes sell quickly, but can't find a new home before they have to move out," Connolly said.

Meanwhile, 27 percent of those surveyed by Redfin say they won't sell their house until they can find one to buy.

Ready to become a landlord? Have you rented out your house? If so, how's it going?

This blog is not written or edited by or the Boston Globe.
The author is solely responsible for the content.

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Scott Van Voorhis is a freelance writer who specializes in real estate and business issues.

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