Should You Rent Your Condo?

26 Jul

Metro®Boston, Publication Date: July 20, 2011
Expanded Content

By Attorney George Warshaw

Consider, for a moment, a significant asset that you already own; one that could generate a stream of revenue well into the future – your condo. 

Rather than sell your condo to buy a new home, would you rent it instead? There are numerous possible benefits. 

The key is to get your interest rate as low as possible today while you are still living in the condominium. By doing so, you place yourself in the best position to generate future “positive cash flow”; one that will allow the rent to cover your mortgage, taxes and condo fees.

With interest rates at distress levels, now is the perfect moment to plan for the future. As an owner-occupant your rate will be lower than what would otherwise be available after you move.

Given the vagaries of the stock and bond markets, the prospective lack of a sufficient future social security payment – at an age when you might actually enjoy it, real estate is a reliable extra revenue source.

If you decide to rent your condo rather than sell it, keep one important thing in mind: if you plan to refinance shortly before you move and rent, the standard Fannie Mae mortgage form used with owner-occupied loans requires the homeowner to live in the condo for 12 months after signing.  Make your plans well in advance.

So be a smart condo owner – plan now for the future, and get the benefit of rents paying your mortgage. 

© 2011 George Warshaw. All rights reserved.

__________

George Warshaw is a real estate attorney and legal author. He represents buyers and sellers of homes and condos in Massachusetts, and prepares wills, trusts, and estate plans. George welcomes new clients and questions at george.warshaw@warshawlaw.com.

Legal Advice: Laws, and court decisions interpreting them, change frequently and this article is not updated as laws change. The content and information contained in this article is neither intended as legal advice nor shall establish an attorney-client relationship. Before making any legal decision, consult an attorney to see how the foregoing may apply to your circumstances.

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