Tuesday, February 22, 2011
Maybe you should (not) rent instead of sell
Do you watch real estate porn? By this I mean, "Selling New York" (HGTV) and "Million Dollar Listing" (Bravo).
Anyhow on "Million Dollar Listing," a woman does not want to buy a smokin’ house, but does offer to rent for a while—and the market is so crummy, the owner says OK.
What was the monthly rent? Fifty grand! The real estate guy says, “Hey, just take the $600,000 a year and wait for the market to improve.”
Yeah, guy—just take it.
Anyhow, Universal Syndicate’s Ellen James Martin points out that renting may not be such a cakewalk.
Being a landlord can suck. Think back—did you ever call a landlord in the middle of the night about a clogged toilet? That could be you answering.
It’s hard to find creditworthy renters these days.
You can’t just do repairs when you feel like it—you have to do them when the renter feels like it.
Your renter could cause a flood or fire or something that causes lasting damage.
The tax advantages and depreciation you may be getting now as a landlord disappear.
One thing you can do is have a registered appraiser assess your home’s future value. You may be hanging on and installing a renter for nothing.
Will that guy collecting $600,000 a year get the midnight toilet call? If not—he has a manager and that can cut into the profit.
Yes—you do have to pay taxes on rental income (attention, Charles Rangel) and many local jurisdictions have a swarm of petty regulations.