rent or sell the s&b house?

[packnrat]

well not sure if the income would be worth it, but having never rented out a place, whats up with doing such (yes bad renters fear).

taxes?

issues with domicile?

thinking using a "renting service" and they send me a check each month. yes costs, but no worry's about fixing that water heater when i am across the country.

no my house is not a huge mansion. it is only about 1100 sq feet. a two and one, detached, but a good sized back yard.

at today's pricing i guess about $900 to $1200 a month.

all new to me so searching for input. as i have some years to go before pulling the cord.

 

[lenp]

Initially we chose a house sitter the first four years we full timed.  Couldn't have asked for a better situation.  Unfortunately she had to move on so we decided to rent for a few years (four more).  No issues to speak of with maintenance other than a drain field replacement that was due regardless.  Decided we wanted to sell the place in 2008 so asked the renters to vacate.  We did not use a rental agent but would highly recommend doing so.

To avoid capital gains taxes we chose to once again have a house sitter for three years and officially call it our home base (we paid utilities and such).  This house sitter was a second cousin and it was not a good situation.  They didn't trash the place but close to it with dog stains all over the carpet and holes in the freshly painted walls where pictures had been hung.

We ended up keeping the place and moving back in after eleven years of full time.  Glad we kept the place as I now have my shop back and ten acres of pasture to keep me busy and healthy!

Lenp

[2Auberts]

Packnrat,

I am a licensed property manager with several of my own rental homes.  I would encourage you to call a local reputable property manager and get them to give you an opinion of value for your home and see if there are other expenses you may not be aware of that will effect your bottom line.  If the numbers work, ask for references from other owners they represent and look them up on social media. We will start our full time life in 15 months and even though I have been a landlord since 1999, I will hire a property manager when we hit the road. Having someone local to deal with issues and receive the eventual 2am phone call is worth the 10% of rent that I will pay them for their services. 

[TXiceman]

We sold the house.  Had a rental property before and decided we did not want to deal with a property manager, property damage, and keeping decent renters.

Ken

[sandsys]

I know there are good property managers out there but every time I think of outsourcing something like that I remember my friend's lawyer who absconded with her kid's trust funds from her late husband's estate. He was popular and had a good reputation. How do you decide who to trust?

Linda

[Kirk W]

13 hours ago, TXiceman said:

We sold the house.

We did the same, setting that fund aside for the day we needed to exit the lifestyle and that allowed us to buy our present home. We just didn't want the tie to any location that a rental property would have been, but a rental can be a good investment in the right area. For us it worked but who is to say what is best for everyone?

[Barbaraok]

When we moved from Ohio to Michigan is 1983, we had experience with being long distance landlords (height of recession, couldn't sell the house).  It ended up being very costly for us when the renter lost her job and it took us MONTHS to evict her and then had to correct the damage done to the house.  We sworn never again to get into that position - but I do know that some people have had success with that type of arrangement.

We set aside funds for whatever comes later like Kirk did - - we just keep moving later down the road.

[Pat & Pete]

We tried to sell the house in 2010 -11 . Not even a low ball offer was made . 

We were going full time , so we became absent landlords . For 4 years we put up with the worries and hassles and higher taxes and the lies . Finally , the tenants decided to buy a different house . 

We spent a solid 3 weeks fixing the damage . Work , eat , sleep ... 3 weeks , every day , all day . 

Then it sold , fortunately . 

Never again .

[Barbaraok]

“Never again”

our thoughts EXACTLY.  

[TXiceman]

10 hours ago, Kirk W said:

We did the same, setting that fund aside for the day we needed to exit the lifestyle and that allowed us to buy our present home. We just didn't want the tie to any location that a rental property would have been, but a rental can be a good investment in the right area. For us it worked but who is to say what is best for everyone?

Kirk, we set aside the money from the house sale as well.  We were just outside of NW Houston and we had no intention of living in Houston again.

We had a rental house once and it was a pain and was so glad to finally sell it.

You just have to do what is best for you.

Ken

Edited December 27, 2018 by TXiceman

[FL-JOE]

If you are sure you never want to live in that home again, then for me it would boil down to what is the best financial decision. If you sell that size home you will not be paying capital gains I am guessing.  You walk away with a set amount to start full timing.  Depending on the housing market in your area and how much values increase each year, will that piece of property be worth 50% more in 5 or 6 years?  If you turn it into a rental property and sale it down the road then capital gains will eat into your profits, but if values in that area are going up quickly then maybe that would be worth it.  On the other hand if home prices are only gaining 2 or 3% each year then you may be better off unloading it and investing.

We considered keeping our SW Florida home (3/2/pool).  Lee County was averaging about 7 to 9% value increases each year we owned it.  If that would continue for just 5 or 6 years it would have been a better financial move for us.  But when it came down to making that decision we picked the safe route and sold.  I guess we didn't want to have to worry about renters, the economy, or the housing market while full timing.

[whj469]

I couldn't agree more Barbaraok! If you plan on going  back and live there some day, it can be ok to be a "slum lord".

[Darryl&Rita]

A good reason to hold on to property, is to use it as proof of intent. As a Canadian, we need to be able to prove that we have closer ties to Canada than the US, should the IRS come looking for tax $$$. Property ownership helps fulfill some of that requirement.

[Kirk W]

19 hours ago, Darryl&Rita said:

Property ownership helps fulfill some of that requirement.

It couldn't hurt with a domicile issue here in the US either. But it really isn't necessary here, especially if you are not changed domicile states.

[remoandiris]

Consider what repairs/replacements the house may need in the next 5+ yrs; new roof, new air con, new appliances, etc.  If you're not sure, maybe spend $300 for a professional home inspector to inspect and give you a written report.  If you decide to sell, you could use the info to fix things that need fixing prior to listing the house.

Our house will be listed next Monday.  I have strongly considered renting.  Nearly every realtor I interviewed has someone in their office who is their rental coordinator.  Realtor told me I could easily rent my house to cover the mortgage.  Wouldn't have much extra for monthly profit, but someone else would be paying my mortgage.

Then I remembered the home inspector's report from when I re-fied a few years ago.  If the inspector's crystal ball is accurate, within 8 yrs the house will need a new roof ($15+K), and new air con (~$7K) and I have a feeling at least a new dishwasher and fridge (~$2K combined).  

Plus, I have no intentions of coming back to this house and the wife is definitely not interested in coming back.  So selling makes the most sense for us.  

[whj469]

That is exactly what I tell my better half. Even if we did go back, it would be to a smaller place or assisted living or even a pine box.

[oldbutspry]

So I see things from the other side - we have rented the last 3 houses we lived in.  They've all been about 10 years old, give or take a couple years.  You would never know it from looking at them, though.  The wear and tear on rental houses is pretty horrendous.  The houses we've rented have had all kinds of low-level damage.  I'd never consider renting a house after seeing what previous renters have done to the houses we've lived in.

And you figure the houses we've rented have been relatively expensive.  I suspect the cheaper rentals get a lot more abuse.

 

[RainbowStalin]

OP, if I were you, I would just sell it. Because you can just re-invest the money in something more interesting. I had the same situation with a house near Bristol. I've decided to sell it and then Covid struck. I was desperate, because nobody wanted to buy it. Then one of my friends told me about this thepropertybuyingcompany.co.uk realtors. I've contacted them, and they helped me to sell it in very short time. And for a decent price, by the way. I've returned to NYC with a whole lot of cash.

Edited August 3, 2020 by RainbowStalin

[rynosback]

Sell. Finding good renters can be really tough. Plus the tax implications. If you were local I would say sure, rent it. But living on the road, it more then likely will be more trouble then it is worth.

[bigjim]

One thing to consider with renting and maybe selling is the pandimic ramifitcations.  What if you rent to someone that could not pay and you were not able to evict.  I really feel bad for folks that are haveing to deal with possibly losing housing through no fault of their own but owner (even if owned free and clear) will be stuck dealing with up keep and taxes etc. to maintain value of their home.

[rynosback]

7 hours ago, bigjim said:

One thing to consider with renting and maybe selling is the pandimic ramifitcations.  What if you rent to someone that could not pay and you were not able to evict.  I really feel bad for folks that are haveing to deal with possibly losing housing through no fault of their own but owner (even if owned free and clear) will be stuck dealing with up keep and taxes etc. to maintain value of their home.

But depending on where they are, values of the suburbs are on a huge up-tic as people Are moving out of cities to a less dense area. Plus they are getting a lot more space for the $$. And the low interest rate is also helping home sales BOOM. 

Edited July 29, 2020 by rynosback

[bigjim]

Valid rynosback, and I am not advocating one way or the other. Just a thought to consider as part of the consideration on what to do. 

[Ray,IN]

Sell, renting is a huge headache. Invest the money for the eventual time ahead when you must get off the road and have something laid-back for that change of lifestyle.

[ToddF]

When you're on the road, most want to be as "foot loose and fancy free" as possible. Being a landlord may get in the way of that objective. I've rented out my home a couple of different times when I was in transition and was always surprised at the problems that popped up. Late rent. Broken appliances. Mostly little stuff but annoying nonetheless.

Make sure you understand the tax code if you decide to rent. You may lose your exclusion on the gain on your personal residence. And depreciation MUST be taken on a rental property and recaptured upon sale in most cases.

It's a very individual situation, certainly could work for the right persons, both landlord and tenant.

Shutting the house down and keeping the place empty will be my choice going forward.

[RV_]

You guys did see this is a 2018 thread. I sure hope he decided one way or another two years ago.

BTW, I would sell. I could have rented two properties with houses and great locations last year but we've been landlords before and will never do that again even if we were always there to fix up as needed. Never mind from afar on the road.

Edited August 3, 2020 by RV_