Wondering how to get rid of bad investment property? If you are considering buying a rental property, you should know that only some investments are created equal. Some properties will make you money, while others will cost you money. If you can’t sell or rent out your rental property and need to get rid of it, there are several options to consider:
Cash for homes.
Buyers are always looking for ways to get a good deal on their properties. If you are thinking of selling your house, consider cash for homes. This is a great way to sell your investment property quickly and painlessly. You can find buyers who will pay in cash, take care of all the paperwork and pay you in full without hassle or delays. When selling your house this way, you’ll be able to get a reasonable price for it too!
Short sales are an excellent way to sell a property with negative equity. In a short sale, the lender agrees to accept less than they’re owed on the mortgage. If you have more than 50% equity in your property, you have other options (you’d end up losing money).
However, if your home has been underwater for some time and has negative equity (i.e., more debt than it’s worth), then a short sale may be one of your best options.
Short sales can also be helpful if there’s no foreclosing involved—a foreclosure would leave your credit score in tatters for years to come! The downside? It will take longer for the title company or other parties to process this transaction; however, many benefits are associated with doing so.
Sell to a real estate investor.
Selling your property to a real estate investor is the fastest way to get rid of it. These investors are looking for deals, and you can sell to them for less than what you owe on the property. Plus, since they’re getting a steal of a deal, they won’t have to pay any commission fees to brokerages who would typically handle the transaction.
A lease-option is a contract between the homeowner and buyer that gives the buyer the option to purchase the property at a specific price within a certain period. The owner of the home, who has agreed to sell it to you at some point in the future, will still maintain ownership while you’re renting it and can use this opportunity as he sees fit.
For example, suppose you want to purchase an investment property but need more money. In that case, your broker tells you about an investor who owns several properties around town and is willing to work with someone like yourself on an installment plan.
You agree with him on terms such as how long he will allow you before buying, how much interest will be added onto what he’s selling/leasing it for (or if there are any other fees), etc. You’ll then sign off on everything before moving forward with anything else — meaning no contracts yet!
Deed-in-lieu of foreclosure.
A deed-in-lieu of foreclosure is a type of loan modification that allows you to transfer your home back to the lender without going through foreclosure. To qualify for this type of loan modification, you must meet several guidelines:
- You must be current on your mortgage payments when submitting your application.
- You must own 100 percent interest in your property (i.e., no co-owners).
- You must have equity in your property worth at least $250,000 (for single-family homes) or $500,000 (for two-to four-unit properties).
If these criteria are met, and you have been unable to obtain another type of loan modification from either Fannie Mae or Freddie Mac (the two government agencies that provide mortgage financing), then there is hope! Suppose a deed-in-lieu lender agrees with these conditions and offers you their services. In that case, they will purchase your home at fair market value so that they can sell it themselves after completing their final inspections and paperwork.
There are many ways to get rid of a bad property, but the best way is to be proactive and take your time. The sooner you can identify and fix up any issues with your investment home, the better off you will be in the long run.