The Tale of Two Homeowners

Just over the hill and down the lane lived Family B that also needed to move out of their house to buy a home in a town that was just under an hour’s drive away. Mr. and Mrs. B decided that it wasn’t the right time to sell and made arrangements to rent out their home.

How does a family make its decision? How will you make your decision? Here are a few issues to consider if you are weighing the choice of selling or renting out your current home:

1. Show me the money. Can you afford to keep two properties? If your tenant left, and the house went unrented for a couple months, could you afford to keep paying the mortgage both places? If the property you choose to rent is close by, you may choose to manage the property yourself, saving costs that would be spent with a property management company.

2. Whose market is it anyway? It’s true what your mother told you: timing is everything, and this concept is especially true in real estate. As you know, the current trend is a buyer’s market, and a seller’s challenge. If you’re moving to an area where the housing costs are less than your current neighborhood, you can afford to take a bit less on the sale. However, if you think you may be returning to the same area, you might be concerned that you could be priced out of this market. These are good issues to discuss in detail with your real estate agent.

3. Attachments are complicated. How emotionally attached are you to your house? Renters may not treat your home the way you do. One sweet grandmother looked over a home left by wayward renters and quipped, “Have you seen my living room carpet? Looks like they changed the oil on their Harley there!” I’d like to point out that after she had carpets changed, she still made a profit. That brings up the next two points.

4. Taxes: One of life’s certainties. When you sell, you can enjoy the advantage of tax-free capital gains. On the other hand, renting allows the owner to deduct items like home improvement projects and property taxes when filing taxes. Little items add up.

5. Long range planning. Millionaires often own multiple properties. How did they get started? They bought houses one at a time and kept them. Then they rented them. This is how many of these millionaires became millionaires.

Whether you’re Family A or Family B or something in between, deciding what will be in this chapter of your home’s story isn’t easy. If you’re working on next step in the plot, give me a call. I would love to hear from you and help you write your own happy ending.

Suppose someone is moving Durham to work at Duke, and is wondering about the neighborhoods there? Or maybe someone wants to know the best school district in the area – or a great place to buy as an investor. They could post a question on Trulia, and get answers from real estate professionals. Most of the answers are great tools that help buyers get a better feel for the area to which they will be moving.

I love hanging out on Trulia; I’ve even got my own Trulia profile. To date, I’ve answered sixty-one questions. I really am crazy about turning houses into homes, and Trulia is another way that I can do just that.