<prompt> Human: Im an accidental landlord and just found out I lost homestead exemption. Im also having to pay a shortage because I technically lost it for last year as well. My mortgage payment was once 1120month with my tenants paying 1250 in rent. Now my mortgage is 1288 for the next 12 months, so Im operating at a loss. I dont have much savings to put into a serious maintenance issue, but I do carry American Homeshield. My tenants signed a lease purchase contract in February of 2016 that was set to close on January 15th, 2017. Theyve agreed to purchase the house at 172900. I currently owe 158500 on the mortgage. In January, they told me that they still had a credit judgment that was preventing them from securing a loan for the house but were still interested. I extended the contract through March, and now theyre being really vague about their ability to purchase it by then while still expressing interest in buying it. Maybe you can help me understand if their dilemma is truly solvable:- Foreclosure in 2011- Two credit cards sent to collections in 2006 and 2007 2600 and 1900 balance each. Each account was closed by credit grantor and their credit report says Bad debt; placed for collection; skip - One pubic record judgment filed in 2013 for a credit card with a balance of 4100. - No inquiries in last 120 days. His credit score is currently 643, which is high enough for an FHA loan. However, he tells me the loan agency said its only the 2013 credit judgment preventing him from securing the loan, and hes trying to get it removed. I have 5000 of their money that Ill keep if they dont buy the house, but they can use it towards their down payment upon completion of the sale. Last I checked, they had about 3500 in their own savings to complete the down payment. I assume and hope they have more at this point. Would the one credit judgment really be preventing him from securing the loan? Heres what Im thinking: Since theyve never been late and keep the house in great shape, I should give them another year with a few caveats. Their rent will be raised by 100 to help with additional cash flow. The area has seen a rise in average home prices, so Ill raise the asking price to 175900. OR I can tell them sayonara, get a realtor, sell the house on the market, and hope and pray Id close at 172900, which I dont believe will happen. My tenants buy the house? I make about 14k on the sale before taxes. I sell with a realtor? 9k before taxes if Im lucky. And thats if it sells. I could end up kicking out tenants that have been great renters and having to sign new people that may be awful. tl;dr - Im currently operating at a loss with my rental property. Great tenants have credit judgment preventing them from buying house. History includes multiple collections and a foreclosure. Credit score is 643. Enough money there for down payment. Should I extend their lease to ensure I get the most money on the sale of the house, or should I kick them out, try to sell at a lesser profit with a realtor, or find myself stuck with new but bad tenants?  <response>: Even at a loss per month, you get to declare depreciation on the house. While thats not a _gain_ per month, it does offset whatever other income you have by several thousand dollars. I get something like 13k per year on a condo. And, of course, during the next year, the house should appreciate in value. Maybe, and Id need to reread your summary to see if youve already recognized this or if its possible with your agreement with them, in exchange for waiting another year to sell it to them, you reevaluate the price a year from now rather than a fixed sum now. Though you risk a potential drop in the price. 