Drop Price and Sell, or Find a Renter?

Home owners who are having a tough time selling their homes face a hard decision – should they drop the price in hopes of attracting a bargain hunter, or should they find a renter and hold on until prices go back up?

Benny L. Kass, real estate attorney and columnist for the Washington Post, offers these reasons why selling now is better than waiting it out.

• Tax implications. Living in a home has its tax benefits. A home owner who has lived in a house for at least two of the five years before it is sold and files a joint income tax return can exclude up to $500,000 of the gain from taxation. Single people can exclude up to $250,000.

• Tenants can make a sale tough. Some tenants don’t keep a home in the same condition as an owner would. Also they may not cooperate with showings, even if the lease says they must.

• Being a landlord can be a challenge. Calls in the middle of the night with demands to repair the toilet are tough.

• Carrying costs are daunting. Some months the house will be vacant, but the owner still has to pay the mortgage, real estate tax and insurance. Maintenance bills don’t stop either.

• No one has a crystal ball. The real estate market may take a long time to recover.

Source: The Washington Post, Benny L. Kass (0510/2008)
The above article was taken from the Washington Post.  On a personal level, I can tell you about being a landlord.  It is really the luck of the draw.  We have been landlords of a condo on James Island; also with a three bedroom home on Isle of Palms.  No matter how nice a person seems upon the intial interview, you never really know how they are going to act as “renters”.  We experienced two extremes- one family was perfect- they called only when some type of repair was needed, rent was always on time, and they kept the house spotless.

Another tenant called with a complaint practically every week- most complaints were unfounded, and we were always given excuses for late rent payments….finally had to evict this person. 

Turning your home into a rental may be a good option for you, but if you’re undecided between selling and renting, arm yourself with all the information you can get. Look at short term and long term pros and cons.  If you need any help or suggestions, please give me a call.  Linda Gordon (843)324-3476