June 19th, 2008 10:18 AM by Lehel Szucs
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)