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I inherited a property I'm unable to live in. I posted a thread on the Home board asking for tips on being an out-of-state landlord. The responses so far have me second-thinking my decision to rent it.
If I think completely rationally and not with my heart, all things considered, which makes the most financial sense, to rent or sell?
Are you saying maybe now is not the time to sell due to the market? If so, if you had the value of the house in cash, would you purchase that out of state property as a rental, or would you invest in something else? You could always sell the house and use the cash on a house that is closer to you and easier to manage. Not sure I would want to be a long distance landlord.
Depends on the property, the local market, and your willingness to be a long distance landlord.
+1
If it's a good rental market and a nice home, I'd personally rent it out and keep the tax deduction, but I'm also trying to accrue more rental properties. Someone who doesn't want to be a landlord would probably have a totally different viewpoint on the subject.
There is a lot to factor in, but like everyone else said, the first decision is whether or not you want to be a long distance land lord.
If you could honestly do either, what is the market like in the area, did it have a huge run up during the bubble huge drop in the down turn or did prices remain relatively stable? Has the place ridden out the bubble fairly well? How are the values in the area relative to historic prices and relative to rents and incomes in the area.
There are a LOT of little things with a rental which require the landlord's attention. Just giving someone a key, looking over potential renters in person, fixing small things.
Many times a renter will complain about something not working. A visit by the landlord can resolve these issues. Maybe along with an inexpensive trip to the hardware store.
But if you are out of town, have a renter who constantly complains about anything and everything, and must call plumbers, electricians, etc. for every little problem, then get ready to spend a small fortune!
Also it is a royal pain to hire contractors to fix things when you are in a different city. Some contractors will inflate the charges or say something needs replacement when just a part will fix it. (If you are not there watching.)
If it's a good rental market and a nice home, I'd personally rent it out and keep the tax deduction, but I'm also trying to accrue more rental properties. Someone who doesn't want to be a landlord would probably have a totally different viewpoint on the subject.
tax deduction????? you mean you call subtracting all your costs off of the rental income a tax benefit? cut the expenses and you will be in better shape . having expenses to subtract is no benefit.
its no benefit.... your paying money out and subtract it off the income. what ever is left is your profit.
even the depreciation isnt really a benefit as it gets recaptured when you sell .
the early years of ownership may leave you with a loss on schedule E and that gets subtracted off your income but all that means is you spent 4 dollars out of pocket and got back 1 dollar . your poorer not richer for it.
the depreciation you have to take can generate a loss on schedule E and while it looks like a benefit it wont be when you sell as its recaptured at up to a 25% tax rate.
its no benefit.... your paying money out and subtract it off the income. what ever is left is your profit.
even the depreciation isnt really a benefit as it gets recaptured when you sell .
the early years of ownership may leave you with a loss on schedule E and that gets subtracted off your income but all that means is you spent 4 dollars out of pocket and got back 1 dollar . your poorer not richer for it.
the depreciation you have to take can generate a loss on schedule E and while it looks like a benefit it wont be when you sell as its recaptured at up to a 25% tax rate.
Oh, good grief. All things considered, it sounds like it's going to cost more to be a landlord than it would be in profit (so why even mess with the headaches just to hold onto the property for sentimental reasons?).
I know a house is just a thing, and it won't bring back my loved one, but even though it's not the right time for me to live in the house now, I figured it would be nice to keep in case I ever did want to live in it down the road. It pains me to said it, but it looks like it might be smarter and less costly to just let it go.
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