Everything You Need To Know About Selling Your House and Renting it Back

Who is typically willing to do this type of transaction?

If you need to take a break from your home, selling and renting back is possible. Many tenants who want to move in will pay premium costs for this opportunity because they know that it is likely they will save money. In Massachusetts, a popular place we buy houses in, we've had homeowners tell us they didn't know this option existed, but we tell them anything is possible in real estate, especially with creative financing.

Make sure that you sign a legal agreement before you finalize the sale. You should check with your lawyer to understand what this contract entails, and you might even want to have an attorney help you through this process. 

The Rental Agreement

The rental agreement should include all the details associated with this transaction, including the rent price. Make sure that you are paid in full for this agreement.

It's important to understand just how long you will be gone when you sign this type of agreement. You don't want to get into a situation where someone lives there without giving you any notice or your rent.

Some real estate investors will tell you that this transaction is a great way to get funds fast, but remember that you need to make sure you get the right amount of money for your house.

We've even worked with landlords that want to move on from their investment property and sell the home to us with tenants living in it.

Arrangements to sell your house and stay in it

The buyer needs to know how much rent he has to pay and how long he will be renting the house. Also, any damage done to the property should be included in the contract.

The tenant needs to know that he is getting into a legal agreement and understands all the terms associated with this arrangement. Monthly rent is the most common type of payment for this agreement.

It would be best if you also were careful about the tenant's credit score and financial history. It may not be easy to find someone who will meet these requirements, but you can always choose to rent it back to someone you know. A rent-back agreement can be helpful in a lot of different ways. Our past clients wanting to sell their house fast in Georgia gained something invaluable, a stress free process.

Check The Market Value

Always check the value of the home before you sign a contract, be sure to look at your house as if you were a buyer. What would be an appropriate price for this area? When you have a good idea of the market rents, it may be easier to find someone willing to pay that rate.

A security deposit should be included in this type of arrangement. If you rent back to someone you don't know, it may be appropriate to ask for some money upfront. When we buy houses in CT, some markets are drastically more expensive than others.

How to sell your house and rent it back to avoid state taxes

If you are looking to sell your house and rent it back, make sure that you check with an attorney first. According to some experts, this is a smart way of avoiding capital gains taxes. However, if the rental period is short enough between two transactions, this may be considered tax avoidance by the IRS.

Check The Closing Date

It would help if you made sure that the closing date is by your rental agreement. If you are renting back, you may have to pay for some time before the new owner takes possession of the property.

Real estate agents can also help you with this process. They understand the laws better than someone looking to avoid taxes. Make sure that your real estate agent has sold enough properties so he can give you an estimate of what this rental rate should cost.

Rent back agreements are a super way to get out from underneath your mortgage payment. If you have been looking for a way to take advantage of the real estate market, this is one of many rental options that can give you some relief.

Check The Purchase Price

You would need to check the purchase price of your house and what it would be worth if you rented it back. This will help you determine how much you should receive as a down payment for this arrangement.

I remember advising a client in Rhode Island before we bought their house, to check the rental cost in the local area before making a decision.

Check The Taxes

You need to make sure that you check the taxes and expenses for this type of transaction. You may end up paying less money in taxes if you skip a few payments and rent the property back to someone else. You must speak with an attorney about what qualifies as tax avoidance and how to avoid it completely.

Sell Your House To Us and We'll Rent It Back To You

There are many different ways to sell your house and rent it back, but the best way for you depends on what's important to you.

If taxes aren't a big concern or if you have no ties in town, then renting out your home for a few months is an excellent option. We've done so much work in Georgia where we buy tons of houses, helping homeowners solve problems like these even if it comes down to letting go of home ownership.

We it all comes down to it, its about what is best for YOU! We specialize in solving homeowners issues even if its they want to sell their vacant land, and all the way to selling a fire damaged house. The great old saying "One mans garbage is another mans treasure". Contact us if you want to discuss your situation and how we can help you today.