Renew lease, or......?? - Jemsite
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post #1 of 8 (permalink) Old 09-08-2009, 02:26 PM Thread Starter
 
Join Date: Nov 2001
Location: Las Vegas
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Renew lease, or......??

I own a condo in Michigan and have been renting it to a couple since October last year. The lease expires October 2 of this year. I just recently got laid off, and will not be able to afford paying the monthly expenses related to the condo. First of all, they are renting at $122 lower than what I pay on my mortgage for that condo, plus I have to dish out another $175 for the association fee every month. So that is almost $300 every month out of my pocket, plus I have to pay the property taxes on it which are expensive.

I reside in Las Vegas now, and have to pay rent, so I can't really afford to hang on to the condo in Michigan. I see no benefit in doing so..........the housing market sucks, forget about equity, so there's no point. The only thing I see is it is just taking money out of my pocket, money I could use to pay bills here in Las Vegas.

The tenant told me they want to keep renting for another 6 months, but that's it.

At this point, it doesn't make a whole lot of sense to keep the condo even if the tenants want to keep renting it for another 6 months.

Do I need to go through a realtor in order to renew the lease with them? Or is this something I can do by myself?

Either way, I want to get rid of the property. I was thinking, renting the condo for another 6 months to them, while putting it on the market to try and establish a short sale with the bank and a buyer.

Or should I not renew the lease, stop making monthly payments, and then let the foreclosure process take its course??

It's a hard decision to make, I don't like the idea of having a bad credit report, but that is something I can repair over time...........it's not the end of the world. At least a short term sale won't have the full negative impact as a foreclosure will in terms of my credit report.
Right now, my credit is excellent, but would take a huge blow if I went through foreclosure.

At this point, I just don't want to keep throwing away $300 a month, I got laid off, and I need that money to survive.

I admit that I have money saved up and collecting unemployment right now......but I don't want to throw away that $300 every month, and then have to pay more than that when the property tax bills come (summer tax bill was $1600).

What should I do??
I'm thinking of renting it out 6 more months, while trying to get a short sale, through a realtor................good idea?
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post #2 of 8 (permalink) Old 09-08-2009, 05:57 PM
 
Join Date: Jul 2008
Location: Houston,Texas
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Re: Renew lease, or......??

Sorry you got laid off. It sounds like you are a little upside down on the condo.
First, why are not passing some of the extra expense on the renters.
Just adjust your lease when the lease is up.
Is the taxes not included in your monthly mortgage payment?
When i bought my house all of that was calculated(estimated) and included in the monthly mortgage payment .
I would say sell it or at least refinance it at a lower rate.
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post #3 of 8 (permalink) Old 09-08-2009, 10:26 PM
 
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Re: Renew lease, or......??

If the market will allow, I'd definitely try raising the rent to cover your total expenses. If your credit is excellent, can you refinance at a better rate to make that a more reachable goal?

Also, rather than a short-sale, have you considered other non-traditional selling options? Since the market is horrid in much of Michigan, you may have luck with a rent to own or land contract option. If you haven't thought about that, it's worth a serious look.
jay ratkowski is offline  
post #4 of 8 (permalink) Old 09-09-2009, 02:45 AM Thread Starter
 
Join Date: Nov 2001
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Re: Renew lease, or......??

Quote:
Originally Posted by Robstar View Post
Sorry you got laid off. It sounds like you are a little upside down on the condo.
First, why are not passing some of the extra expense on the renters.
Just adjust your lease when the lease is up.
Is the taxes not included in your monthly mortgage payment?
When i bought my house all of that was calculated(estimated) and included in the monthly mortgage payment .
I would say sell it or at least refinance it at a lower rate.
I had to compete with other people who are trying to rent their condo in the same complex. When I moved to las vegas, I was desparate to find a renter, so I had to lower the price enough to get one. He said that mine was the right price, but he was also considering other ones, and asked if I could go a little lower than my asking price, so I did.

Property taxes are not included in the mortgage, it is a separate bill from the city of kentwood. Maybe it's different for a house?? I bought a condo which may be a little different in some things (like having to pay the association fee).

At this point, I just want to try and get rid of it, really no benefit to keeping it even though I might be able to get the mortgage rate lowered from the Obama plan. Even with that, that is geared to try and keep people in their homes. I don't live there anymore, and I'm certainly not moving back to Michigan, I moved out of there because of the job situation. It's terrible there.
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post #5 of 8 (permalink) Old 09-09-2009, 02:52 AM Thread Starter
 
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Re: Renew lease, or......??

Quote:
Originally Posted by jay ratkowski View Post
If the market will allow, I'd definitely try raising the rent to cover your total expenses. If your credit is excellent, can you refinance at a better rate to make that a more reachable goal?

Also, rather than a short-sale, have you considered other non-traditional selling options? Since the market is horrid in much of Michigan, you may have luck with a rent to own or land contract option. If you haven't thought about that, it's worth a serious look.
My renters signed the lease with the option to buy my condo. Talked to him monday and he said he is no position to buy the condo, but wanted to rent it for 6 more months. So no luck in selling it there, was really hoping they were going to buy it. Haven't tried the land contract option though...........not familiar with that. I'll google it and see what I can find.

At least they want to rent it for a little more while, which can buy me some time to get it back on the market and hope to find a buyer.............a short sale would probably be my best bet. The time is good for people who can afford to buy, so I'm sure there are scouters out there looking for a great deal.

If we renew the lease, I'll probably put it back on the market and list it for a good chunk under the market value, and then hope for a short sale.
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post #6 of 8 (permalink) Old 09-10-2009, 10:31 AM
 
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Re: Renew lease, or......??

sounds like good plans but if you can change the lease when it's up for renewal, i would do it to include the $300 more a month. the guy doesn't want to buy it because he isn't in any position to buy. so, why should you take the hit to cater to him. when the lease is up i would tell him, i can do another 6 months but under the circumstances of me wanting to get rid of it NOW, if you would like to extend 6 months, i need to increase by $300 a month to keep it going, unfortunately i don't have any choice. you cater to him, he should cater to you. i would understand if i was renting. not sure how much info you want to give him but simply saying, financially, you are unable to keep it going and need to get out from under.... or whatever wording you use. if he doesn't know already, i would make it known you have been taking a $300 hit to accomodate him and unfortunately it can't continue...etc etc. that's $1800 man. if he doesn't like that, then i would let him know the 2nd option.... you will be putting it on the market and you cannot guarantee it will be there in 6 months. if he doesn't want to front the extra money for 6 months, then if it sells in 2 months, well, that's the gamble he will have to take.
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post #7 of 8 (permalink) Old 09-10-2009, 01:58 PM Thread Starter
 
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Re: Renew lease, or......??

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Originally Posted by shredmaster View Post
sounds like good plans but if you can change the lease when it's up for renewal, i would do it to include the $300 more a month. the guy doesn't want to buy it because he isn't in any position to buy. so, why should you take the hit to cater to him. when the lease is up i would tell him, i can do another 6 months but under the circumstances of me wanting to get rid of it NOW, if you would like to extend 6 months, i need to increase by $300 a month to keep it going, unfortunately i don't have any choice. you cater to him, he should cater to you. i would understand if i was renting. not sure how much info you want to give him but simply saying, financially, you are unable to keep it going and need to get out from under.... or whatever wording you use. if he doesn't know already, i would make it known you have been taking a $300 hit to accomodate him and unfortunately it can't continue...etc etc. that's $1800 man. if he doesn't like that, then i would let him know the 2nd option.... you will be putting it on the market and you cannot guarantee it will be there in 6 months. if he doesn't want to front the extra money for 6 months, then if it sells in 2 months, well, that's the gamble he will have to take.
I can tell him that, but I highly doubt he will fall for it. That's why he decided to rent mine in the first place, everyone else was asking too much rent.

And what if I tell him what you said and is not willing to pay the $300 extra a month??

So if he says no, and then moves out, I have no choice but to go down the delinquent payment road which ultimately leads to foreclosure, the worst case scenario.

I'll have to put it on the market, and hope to sell it asap before I start receiving foreclosure papers from my lender.
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post #8 of 8 (permalink) Old 09-16-2009, 04:07 AM
 
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Re: Renew lease, or......??

Quote:
Originally Posted by SilverSurfer2 View Post
I can tell him that, but I highly doubt he will fall for it. That's why he decided to rent mine in the first place, everyone else was asking too much rent.

And what if I tell him what you said and is not willing to pay the $300 extra a month??

So if he says no, and then moves out, I have no choice but to go down the delinquent payment road which ultimately leads to foreclosure, the worst case scenario.

I'll have to put it on the market, and hope to sell it asap before I start receiving foreclosure papers from my lender.
Firstly, sorry about the lay off.

It sounds as though he is renting for lower than the market price in the area. If everyone else is "too expensive" then he isn't going to find anywhere cheaper.

I would have thought that in the current housing market there are a few more people looking to rent.

Still, I can see your position, you should try and sell it.
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