How many times have you ended up with the statement ‘I’d rather sell my house than…’? This is becoming a common phenomenon nowadays. The reason for Negative equity of houses has contributed a great deal in the ‘sell my house’ attitude. Negative equity- whereby the mortgage value of a property exceeds its expected sale price is a stinging problem for sellers nowadays. Holding negative equity property may be one of the reasons why you would desperately call out to ‘sell my house’.
A great majority of property is victimized by the negative equity problem due to the 2008 drop in property prices. The year saw big business tycoons such as the Lehman Brothers falling apart because of the destroying mortgage problems. This resulted in the fall of property prices in Perth and the negative equity problem that was bound to follow. In such a situation, what could be the most appropriate step to take? There are two possible solutions to this problem which would neither require you to vacate your property as soon as possible nor would ask you to file for bankruptcy. How bout we explore these magical possibilities?
- 1. Renting Out The Negative Equity Property
This is an easy way out! Because it will ensure a steady income for the seller which will help cover quite a few running expenses of the house. However, you do need to be precautious because renting out property does come with its disadvantages as well;
- The income you receive in the form of rent is hardly ever sufficient to pay off your mortgage. This would probably translate into more fatigue as you may have to pay for the rent of your own house as well! Moreover, if the mortgage remaining is enormous in amount, it would inversely be related to the amount of rent that is receivable on your property: Therefore, rent may not necessarily be able to bail you out from your problems!
- Rent is one constant income you will be receiving against an escalating amount of costs. Although you have placed tenants in your house, certain costs still have to be catered by you. These include maintenance of the house, property insurance, service charges and mortgage payments. Additionally, if a management company has intervened to help you obtain tenants, you will have to bear void periods as well with no rental incomes.
- Mortgage rates are on an ever increasing trend: The base rate for banks in Western Australia is pretty low which entails that the arrow for the mortgage rates is set pointed straight upwards.
- If your final aim was to sell off the property and get rid of it, giving it out on rent is not necessarily a permanent solution. You still haven’t gotten away with the mortgage payments; the negative equity factor is still looming over you! Your stance to ‘sell my property quickly’ can largely be challenged. Your life is fully invested in the property and unfortunately your luck with property is still at a standstill.
So is there no solution to negative equity, you may ask? Will I be dragging on in my life with these chains all over my body? Well, technically not! This might not be another option to restore your claim to ‘sell my house quickly’, yet it is the best possible way to dispose off your property remnants.
Negative Equity- Forget And Delay!
An effectual way of answering the query to negative property is to offer a delayed purchase of property in W.A. You might think that this is not what you want because in your words, ‘I want to sell my property quickly’ but this really is the best measure you can take. Remember, wounds take time to heal!
With the delayed purchase you can obtain the entire mortgage amount through the sale of the property over a spread out period. This delay in the payment allows property prices to rise considerably so as to equal or exceed the mortgage amount; a bounty you get by moving away from your ‘sell my house quick’ attitude.
The advantages that overshadow rental property are:
- Sellers become cost-free: they don’t need to make any more payments. A relief isn’t it?
- The title, in essence is transferred to the buyers who then become responsible for the property then onwards
- Most importantly, the seller maintains the control on the mortgage payments and its title which ensures no deterioration in the seller’s history.
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