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I don't like where I'm living, and I want to move to another state. The issue is that I have some rental properties where I'm living now. I could either sell them all and move, or I could hire a management company to take care of them for me. Now, financially for me it's a tossup either way. I own them outright, so I'm in the position where I could sell them and not be particularly concerned about the real estate market now, and not mind if I have to wait a long time for them to sell.
So, putting aside the issues of the current real estate market et cetera...what do you think is the better way to go -- sell and start over with new properties in the place I intend to move -- or become a long distance landlord and have to deal with the problems that arise from that?
I suppose what I'm most concerned about is the fact that I won't just be able to drive by on a whim and make sure my properties aren't trashed or something. How much luck have those of you using management companies had with them being very good at taking care of your houses?
Be sure to ask your accountaint about tax liabilities of both options.
Be sure to ask your accountaint about tax liabilities of both options.
I'm aware of those, yes. "Losing" money is not an issue. Neither are taxes. At this point I'm purely concerned with the question of whether or not others have had good luck being long distance landlords.
It's really a question for your accountant. If you sell them all, you'll have capital gains and depreciation recapture costs, plus you'll get thrown into a higher income tax bracket.
On the other hand, if a democrat is elected president, we know the Capital Gains tax rate will go up substantially (it's only 15% at present).
A more general question to ask yourself is "what will I do with the money and will it grow better in a CD or Mutual Fund account or will it grow more if I leave it in the property?".
Another question to ask yourself is whether or not you can emotionally let go of control of the properties and let a property manager run them for you. I manage properties and I'm always very careful about taking on owners who have been doing everything themselves for a number of years. Some are burned out and ready to let go. Other are just looking for an assistant to order around, and that ain't gonna be me.
Anyway, some food for though for you.
Steve
Last edited by austin-steve; 03-29-2008 at 03:17 PM..
Reason: typos
The current capital gains rate expires in 2010 or 2011?
You could also sell them and do a 1031 exchange, buying new property wherever you move, which would keep you from having to pay capital gains and recaptured depreciation.
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