Drop Price and Sell, or Find a Renter?

Sellers may cringe at lowering the price, but have they considered the costs and other implications of becoming a landlord?
By: Benny L. Kass: REALTOR®Magazine
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.