4 Solutions to Getting Rid of an Investment Property
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Real estate investing has become a popular solution for Americans looking to make some money on the side. Property flipping and renting can warrant a return of thousands of dollars if done correctly. Though the perks are plentiful, there are instances in which you may need to get rid of the investment property. Whether you’re not making what you thought you would, you cannot afford to maintain the costs, or you’re dealing with personal emergency, until you get rid of the property, the debt is yours alone.
1. Lease to Own
If the issue is simply that you no longer want the responsibility of owning an investment property, then you can consider a rent to own option. Advertising your property with this option will increase the number of eligible applicants allowing you to find a serious potential buyer. Within a few years, the tenant can apply for their own mortgage and assume responsibility of the property, therefore eliminating your debt and financial ties to the property.
2. Short Sale or Deed-in-lieu
Another option for getting rid of your investment property would be to consider a short sale or a deed-in-lieu. This allows you to sell the property for less than what is owed on the mortgage – pending the approval of your lender.
A deed-in-lieu, on the other hand, is a transaction between you and the lender. Essentially you sign over ownership of the property to the lender so that you don’t end up going through foreclosure. These solutions are both best if you’re losing a lot of money and just want to cut all ties to the property as soon as possible.
3. Strategic Default
When you’re unable to make your mortgage payments you can simply stop making them. This can work but can take some time. As the foreclosure process can take as long as 2 years to complete. You will have to wait several months for the lender to send a notice of default. While the house will end up being repossessed, you have a few years to stack as much money as possible so that you’re not destitute when it is time to turn the property over.
4. Find Another Investor
There are investors out there who will offer you top dollar in cash for your property – if it is worth it. You can check with local investors to see if they might be interested in purchasing the property as is. Obviously, you’re going to want to make sure that you ask for a price that will cover the balance of your mortgage. Cash offers are often quicker to deal with and can get you the funds you need to start over somewhere else.
If you can’t find an investor that will purchase the property outright, they might be interested in investing in the property as a co-owner with you. If they have more financial resources and the means to make the investment property profitable, this may be an angle you should consider as well. While you won’t get the full profit, you will get a percentage that is likely more than what you’re getting on your own.
Investing in real estate might be one of the increasingly popular methods for generating long term income, but there are instances in which you need to relinquish your responsibilities. Whether you have to relocate, are not getting enough income from it, or need cash fast, the above mentioned options are the best to reduce the blow to your credit – or your wallet.
Photo courtesy of: paulbr75
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