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| *Ostroff, Fair and Company>>>Renting & Real Estate |
Are there any benefits of renting a house out vs. selling it? |
Are there any benefits of renting a house out vs. selling it? If you've lived there a few years you should have some equity. If you're in a strong rental market than I would rent it. Before you do get it refinanced and pull some cash out of it to set aside for those times when rent isn't coming in. Do this while you're still living in it. The mortgage rules are different if you live there. Later you can then rent it out and make sure you get enough to cover all of the houses expense. Pass as much as possible on to the renter, ie, utilities, cable, garbage pickup, lawn care, snow removal. Or you can make it all inclusive up to a certain amount for the utilties and include it in the rent. That takes extra management though. Make sure you keep it insured and that the insurance company know's its a rental so you don't have to insure the contents. If you don't live near by like within 10 - 15 minutes where you can at least drive by every week or so then you may want to find someone who can and pay them to. This type of service especially the drive by inspection aren't that costly but can alert you to problems when otherwise the first phone call might come from the police, or other government authority. If your house is pretty up to date and well maintained rent it. Keep the appreciation growing for you and have someone else making the payment. Get everything in writing when dealing with tenants even if they're friends or family. Set aside any extra income from the house for repairs and maintenance. It will need it some day and you won't have it if you spend all of the cashflow every month. Best of luck. Source(s): Experience If you can get the right renters, then yes renting is good. If you get someone that doesn't take care of it then you are out a lot of money on repairs. I rented my friends house for eleven years and my husband kept the yard so pretty they kept raising the value of it. renting provides a continuous income (as long as it's rented of course) selling it provides some bulk money as long as you sell it for more than you owe I'm a landlord There's one major disadvantage to renting it that most homeowners miss. Internal Revenue Service Section IRC 121 states you may take up to ($500,000 if married) ($250,000 if single) in profits if you lived in the home as a primary residence for 2 years and 1 day. If you move out and rent it, after 2 years you lose the tax benefits of selling that home and now have to move back in to regain said benefits. If you have some good equity built up in the home, I would sell it and take the tax free income. Terry S. http://www.Welcome2Arizona.com Real Estate is almost always a great investment. Market the home as for sale, for lease, lease option and rent to own. Someone out there wants to live in your house you just need exposure in order to find them. If you need some of your equity as down payment for your next purchase you can open a home equity line. To zero out the mortgage liability for new mortgage approval you will need a lease for 1.25% of your total PITI payment. If your PITI is $1000 you need a $1250 renter. Be cautious and get the right renter. Be sure they have open lines of credit so a job loss won't affect you as they can borrow from their own credit card. Try to lease option. You get a nice down payment and they usually don't buy so you get to do it over and over again. |
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