Avoid foreclosure by renting out your home

Selling your home, and getting the price you want or need for it, isn’t always as easy as it seems, especially in our current economy. If you are facing foreclosure you may have to weigh your options when it comes to paying your mortgage. Instead of letting your house go into foreclosure look at the options you have for renting it.

There are a few options for renting out your home.

Rent out your entire home and move yourself to a cheaper house or apartment. While you may not be able to afford your current mortgage there are others who can afford it. Make sure that you add up all of your expenses for the home when renting it out. Do not just rent it out for the monthly amount of your mortgage but add in the cost of taxes and insurance as well. If you can’t rent it out for the full price you need can you make up the difference?

Check with your county or city on the regulations with renting in your neighborhood and make sure that your home is in good shape. You cannot rent out your home if your fridge doesn’t work and the bathtub leaks.

If you can, you may decide to rent out only a portion of your home. You may have a mother-in-law apartment, basement, or apartment over your garage that would allow you to offset the cost of your mortgage. Renting in this way means that you can have day to day contact with your renter. Decide what kind of renter you are looking for. Perhaps a college student or a divorcee if you have children, or a small family if you have more room.

Have a lawyer or property management company draw up the contract for you. You may only want to rent month to month so if you get back on your feet you can move back in sooner.

Set back extra money for repairs and in case your renters do not make a payment. Be prepared for late night repairs and people not caring for your house as you would. While this isn’t the ultimate decision, it could help you keep your house and keep you from having a foreclosure on your credit.

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