If you’re buying a short sale as an investment property to rent out, it would seem like a good idea to give the previous owners first dibs, right? The former owners probably like where they are and wouldn’t mind avoiding the hassle of packing and moving. Actually, it’s a terrible idea.
Oftentimes, renting a short sale to the previous owner is simply not allowed, as stipulated by clauses and disclosures and the like. Buying a house is complicated enough, and a short sale is even more so, so make sure you understand all the fine print. More often than not, you’ll find in the fine print that you just can’t do it.
It may seem like a great idea to you as the new owner and the previous owner. You might talk it out and they might see it as you doing them a great favor. Everyone may be happy at first, but resentment often comes when a person is at the mercy of someone else, especially when it comes to something that comes with all the emotions of something like a house.
If you’re depending on someone to pay rent on a house, would you really trust the person who just sold their home for less than it’s worth because they couldn’t afford it to pay the rent? Not to disparage people who short sell their homes, it happens for any number of reasons, but the hardships you have to prove in order to qualify for a short sale are not flippant or easy. So while it might feel like you’d be doing the person a favor, you’re probably going to end up making things harder for yourself.
If you think you’ll have that hard of a time getting a recently-purchases property rented, talk to your short sale agent. Chances are they know people who can help you with it. And if you have any other questions about the intricacies of short sales, call Nilesh Jethwa at 910-622-0319. He is a short sale expert in the Wilmington, NC area and would be glad to help.