Homeowners who are behind in mortgage payments often make one mistake that, if not made, would allow them many more months to recover financially before losing their home. This mistake is when borrowers move out of their home before they are legally required to do so. And now, with the steep rise in the foreclosure rate over the past few years, there are even more reasons to stay put as long as possible.

Of course, a small number of homeowners realize the financial advantages of delaying the final move into a new apartment or rental house for as long as they can. Every month without a mortgage or rent payment is extra money that can be used to pay off other bills, keep on top of car payments, or simply save up for a security deposit or emergency fund. And as long as they still have legal rights to remain, there is no reason to move just yet.

Some homeowners even go to great lengths to get even more time from the bank to stay in their home. They do whatever they can to apply for solutions to foreclosure, request postponements of a sheriff sale, and defend the lawsuit in court for months. Finally, they file bankruptcy to drag the process out even longer. In many cases, this can result in months or years of living rent and mortgage free. A far greater number of homeowners, though, fall behind on their monthly bills, listen to the lender’s threats of foreclosure, and simply move out of their house. The property sits abandoned while the banks takes it through the legal foreclosure process, and then it sits abandoned while the bank hires a local Realtor to sell the home. In the meantime, if falls into disrepair and becomes a victim of squatters or people stripping the property of anything of value.

However, now that banks have so many foreclosures on their books, many foreclosure auctions are simply being postponed for no apparent reason. While more homeowners than ever are applying for assistance, even more sheriff sales are being delayed. In addition, lenders are often incompetent enough to proceed with a public auction of a home even if the borrowers are negotiating for a loan modification or other plan. This indicates that the banks are voluntarily postponing some sheriff auctions in order to avoid having to declare the loans as losses and then declaring the properties as assets at their true market values. Banks have gotten away for years with overestimating values of homes in order to inflate the values of the loans on the properties and the securities made up of these mortgage debts.

To rent or to sell is the question many homeowners face when contemplating the option of owning an income property. Before you decide to officially become a landlord, here are a few things to consider while you make your decision. The very first factor to evaluate is whether or not you can afford to own two properties. You may be able to refinance your old home or borrow against its equity in order to come up with a down payment on your new one. But, once you officially own both properties, you will incur expenses that you might not expect.

Also, you will have repairs; which are not always as easy to plan for as you might assume. What happens when one of your tenants decides to leave the bathtub running for a few hours on accident? Or worse yet, what if they turn off the heater in the middle of winter, go out of town for the weekend and let the pipes freeze and burst? Sure, you’ll plan for the occasional coat of paint or garbage disposal repair, but oftentimes repair bills come in much higher than you budget.

You’ll also want to think about other factors that are out of your control. What will you do if you end up with a deadbeat tenant? Some areas take months to evict a deadbeat tenant. Will you hire a property manager or handle the property yourself? If you plan to live more than an hour away, you might want to consider turning over some of the hassle to someone else. For example, if you live in San Diego but your rental is in Laguna Beach, it will be a serious pain to drive all that way to show the property to prospective renters. But be careful! Some property managers charge ten percent or more of the property’s monthly rent.

If you choose to sell, current tax laws offer you a window of opportunity to avoid paying taxes on the gains from your former home. If you lived there for any two of the previous five years, you can sell a home, even if it is currently used as a rental property and any gain on the sale of the house is excluded from taxation. The limit is up to $500,000 for married taxpayers filing a joint return and $250,000 for single people. You will, however, still be responsible for the home’s annual property taxes.

Being a landlord may be a serious pain, but it also brings in extra revenue each month. It’s up to you to decide whether or not you’d like to venture into rental property waters. Even if you try it and decide it’s not for you, you can always sell the property and walk away without having to pay a heaping amount of gains taxes. If you are serious about the endeavor, talk with an experienced real estate agent about your options.