Power Renting Could Save Your Home Sale by M. Anthony Carr
Serious markets require serious means of moving real estate. It takes more than just a beautiful home and a good price to sell a house these days. (Well, in some cases, at least.) Particularly for cross state or interstate sellers who are facing a mandatory move, renting out the house is one of the options available to them to get out of two payments. There are a few more alternatives to this option available, as well. - Rent with power. Don't just offer the house for rent, but open it up to rented furnished, rented short-term, rented for leisure (if you're in a destination city), such as New York; Washington, D.C.; Los Angeles, etc., where tourists are looking for 1 and 2-week rentals to vacation.
Corporate rentals are an option as well, where a company needs a short-term rental (or long-term at times) furnished for its executives and their families. Keep in mind you're looking to cover your mortgage and if you bought high, you may be only able to cover that amount if your mortgage payment is way above the going market rate for rentals. One of the ways to receive above-market is to rent more than just the house -- your furniture, as well. Short-term leases (under 12 months) also customarily come with a higher than market rate than those wanting to rent their properties to only tenants who are willing to stay more than a year. A good relocation and corporate housing agent should be able to help you determine a rental price for your single-family, fully furnished home. A fully furnished, short-term home can bring in several hundred dollars more per month than their bring-your-own furniture counterparts. - Rent-to-own. This option is one that can come with some headaches if you're not careful. The rent-to-own scenario has been a model of home selling used by investors who have worked with credit-challenged buyers.
This style of sale is a combination of a rental lease and an option to buy sales contract. The buyer pays a small down payment and then pays an above-market rental payment. The money above the market rate is usually applied to the tenant-buyer's down payment funds which are applied to his credit at settlement that occurs in the future, if at all. The price can be determined at the time of the contract signing or the tenant-buyer could negotiate to pay a future amount, which can be a bonus or a bomb depending on where the market goes in the future. - Carry a bridge loan. If the seller can carry two mortgages, he may want to consider a bridge loan which includes an option ARM scenario.
As you may know, the option ARM can provide a buyer with a really low monthly payment for a short-period of time. However, the least amount on the option ARM is not even paying the interest payment. In essence, the borrower's loan amount keeps growing if he never pays more than interest. In addition, at some point in the future, the loan amount is amortized over a shorter period than the usual 30 years and the monthly payment could escalate by hundreds or thousands of dollars per month. The benefit to this mortgage is that it gives a seller/buyer the ability to carry an extraordinarily high mortgage amount while he's waiting for the first house to sell. The borrower can then move into his new house of choice while his former home is still on the market. Seek out a reputable loan officer to help you with this style of financing and read the fine print for any terms you just cannot accept. Be careful with this program and be sure to price the first home you own aggressively so it will sell quickly. In a slow market, your best defense is, of course, a pricing offense. However, at times, it may require even more aggressive action -- such as creative financing and dealing. | 
