Survive the Layoff: Turn Your Low-Rate Mortgage into Opportunity
Many Seattle-area homeowners locked in mortgage rates between 2% and 3% during the pandemic. With today’s rates around 6–7%, selling means giving up that advantage. Job packages from recent tech layoffs are starting to run out, and many workers are facing a strange job market. Some may not find new positions quickly, while others are considering moving out of state. For homeowners in this situation, the smarter move may be converting your property into a rental.
Why a Low-Rate Mortgage Is a Valuable Asset
Selling a home with a 3% mortgage in today’s 6–7% rate environment means giving up one of the best financial advantages you could have. By renting instead, you can generate income, cover your costs, and preserve your equity while waiting for the market to become more favorable.
Rental Income Potential in King and Snohomish Counties
Here’s what the numbers look like today:
King County: Average 3-bedroom rentals go for $3,200–3,600 per month.
Snohomish County: Average 3-bedroom rentals range from $2,800–3,000 per month.
Example Scenario
A homeowner with a $400,000 mortgage at 3% on a $650,000 home pays roughly $2,300–2,400 per month, including taxes and insurance. Renting out the home at current market rates could generate positive cash flow, even after maintenance and property management costs.
Benefits of Turning Your Home into a Rental
Cash Flow: Cover your monthly mortgage and expenses while earning modest income.
Long-Term Appreciation: Hold onto a low-rate mortgage while the property value grows.
Tax Benefits: Depreciation, expense deductions, and potential 1031 exchange opportunities can reduce tax liability.
Things to Consider
Before converting your home into a rental, think about:
Can your rental cover carrying costs and management fees?
Is the property in rentable condition?
Will you self-manage or hire a property manager?
Have a financial cushion for repairs or unexpected issues that may arise. Even well-maintained homes occasionally need maintenance, and having a buffer keeps you from stress if something breaks.
Conclusion: Make Your Low-Rate Mortgage Work for You
If you’re holding a home with a below-market mortgage rate, renting could be a smart move instead of selling. You preserve financial advantages, generate monthly income, and position yourself for future market opportunities.
Reach out today. I can help you run the numbers, prepare your property, and even manage it for you in King or Snohomish County.
