Owner Financing Primer
If the sellers can't get their home sold they will often consider renting it. That way they get some money coming in to help with their payments. They have probably also heard you can make money renting property, and get lots of tax deductions. In some markets they will also be approached with offers to lease/option the property, which is really just another form of rental.
I know from expensive personal experience the decision to rent creates much larger risks that are apparent to those who have not been in the rental business before. Renting, if not taken seriously and treated as a business, is a serious threat to your financial health.
If you are considering renting because you can't sell you are already in a market where you are competing with other sellers who have polished their homes to show as well as possible. There won't be any chipped paint, soiled carpet, dirty windows or any other issues which might turn off a prospective buyer.
When you rent your house the rentor will not have the same standards you do. In addition, your moving out and their moving is will inevitably cause some damage. An appliance will dent a corner bead and chip the paint. The carpets will get snagged on something, etc. If the tenant doesan't have the same standards of cleanliness you do (they won't) they can easily reduce the value of the home by 20% in six months! Hard to believe, but true.
There is an old saying in the rental property business "Compared to a bad tenant, a vacancy is a delight." You better believe it's true!
Don't get me wrong, rental property can be a terriffic investment and rentals have created a lot of wealth. However, I think they seldom do that for folks who were dragged into the rental business because of financial desperation in a soft housing market.