Should i sell my house or keep it as a rental?

Question

I have owned my house for 6 months and now may need to move for a new job... Should I try to sell my house and risk taking a loss (very likely considering the housing market, and high realtor fees), or try to rent it and hire a property manager to manage the property (I will be moving a thousand miles away and cannot take care of the property myself). If I do rent it, is everything I spend on the house (lawncare, paint etc.) now tax deductible since its sort of like a small business???

Answer 1

Under the conditions named, you might want to keep it as a rental. But before you decide, determine the likely rent level by checking newspaper ads for comparables, and then do a cash flow analysis to see whether you can stand the negative cash flow (which you will probably have). Expenses are deductible, but the passive loss rules kick in here, and they are a mess; you will want to talk to a tax advisor.

Answer 2

Rent it out! Yes your expenses will be deductible. I suggest you try renting to some students if your house close to that area - if you don't mind several people in the house. You can charge enough rent to make up your mortgage payments. You have not owned your home long enough to get any equity out of it. I say rent it out for at least 7-10 years, then sell. Or keep it - owning property is important in this country.

Answer 3

You might not be able to rent it for your mortgage, you need to check that out. You also don't need a manager for just one house, I manage rentals in Oregon as well as California w/o a problem.

Talk to a tax person about the deductions. I think you have to incorporate and put the house into the corporation, but I may be mistake. Everyone does it that way though, at least around here.

Answer 4

I am not sure about the tax deduction, you should check with your tax person, however I would definitely rent it out because though the market is on a downward turn (as we all know what goes down must go up) and in the mean time you will be building equity and earning rental income. Oh, you should have the renter maintain the lawn.

Answer 5

Make sure you do your homework on this one. Check with local property managers, and also find some people who have used those managers to rent their homes. Who do you think would give you a more unbiased opinion? Also, it may be worthwhile to check out the book "The Next Great Bubble Boom" by Harry S. Dent. He has some great information about housing trends and what is begining to happen in the market.

Answer 6

It really depends on what type of neighborhood you are in and what type of rent you can get. My friend bought a house in a "bad neighborhood" in early 2004 for 190k. He refinanced and took money out with a balance of 210k. He moved in mid 2005 and wanted to put his house on the market for 250k (overpriced) and received offers of 210k. He decided to rent instead and is laying out 300 per month to keep this property. This would be ok if the property is gaing alot of equity but it's not. The house is very small and would most likely be torn down and re-built with a better house. Land values in the area are around 170k-185k. I feel he made a big mistake and the type of renters have bad credit etc. It will take him many years to start gaining equity because of his location. If you are in a great neighborhood and you feel it will be worth alot of money in the future then I would say rent it out, but if it is not then you should sell it because it will be a giant headache to evict, you will be paying for legal fees, and don't forget about the lost rent (plus the money you have to lay out for the mortgage).

Answer 7

Rent is the best option, i would say, its better form of income too as against selling it at a loss!

Answer 8

Rent it out.