Military Significant Others and Spouse Support - MilitarySOS.com
Results 1 to 9 of 9

Thread: Rent out a house or sell it?

  1. MilitarySOS Jewel
    Jazmine's Avatar
    Jazmine is offline
    MilitarySOS Jewel
    Join Date
    Jun 2011
    Posts
    9,757

    #1

    Rent out a house or sell it?

    Advertisements
    Looking for some input for ladies that made the decision to sell their home or rent it out when moving to a new base!

    Are you renting through a property manager?
    How much responsibility do you have and what is with the property manager if you have one?
    How much does a rental complicate taxes?
    Looking back is it worth it to keep a home as a rental?

    If you sold, did you handle the closing from your new base or were you required to be at the closing?
    How long did it end up for your home to sell?
    Have far ahead of your PCS did you start working with a realtor?

    Thanks!
  2. Senior Member
    Guynavywife's Avatar
    Guynavywife is online now
    Senior Member
    Join Date
    Aug 2007
    Location
    Maryland
    Posts
    19,296
    Blog Entries
    2
    #2
    Done both. There are so many variables. Issues are whether you will make or lose money if you sell now. (don't forget all the costs associated with selling, which can be about 10% of the sales price). Can the rent you charge cover the cost of your mortgage? If you want to buy at your new place, can you afford two mortgages? If you rent it out, can you afford to pay the mortgage if you don't have a tenant? Also, how long do homes typically stay on the market in your area?
    Income tax for rentals is not difficult. It is income from rent minus expenses of owning the house. But you may not be able to take the mortgage deduction when you are renting it out.
    If you want my opinion on your relationship or life issues, just ask Villanelle!
    Quote Originally Posted by LittleMsSunshine View Post
    I think it's really funny when people come on here, and automatically assume that everyone here is a gung-ho, hoo-rah, i-bleed-red-white-and-blue, kiss-my-military-ass, people-in-uniform-can-do-no-wrong, and i'm-entitled-to-everything bitch.
    "RIP Blackie, and Whitey, New Whitey. Goodbye Poopers and Momma Beige and Lady Grey. New Blackie and the Whitey Sisters rule the roost now!"
  3. MilitarySOS Jewel
    Jazmine's Avatar
    Jazmine is offline
    MilitarySOS Jewel
    Join Date
    Jun 2011
    Posts
    9,757

    #3
    Quote Originally Posted by Guynavywife View Post
    Done both. There are so many variables. Issues are whether you will make or lose money if you sell now. (don't forget all the costs associated with selling, which can be about 10% of the sales price). Can the rent you charge cover the cost of your mortgage? If you want to buy at your new place, can you afford two mortgages? If you rent it out, can you afford to pay the mortgage if you don't have a tenant? Also, how long do homes typically stay on the market in your area?
    Income tax for rentals is not difficult. It is income from rent minus expenses of owning the house. But you may not be able to take the mortgage deduction when you are renting it out.
    Thanks!

    The reason that we're considering renting is that houses on this street have been on the market for a few months and if we're going to have the house around it might as well be an investment but ideally we'd like to just be done with it and not have the extra hassles of a house in another state/country.
  4. Senior Member
    Guynavywife's Avatar
    Guynavywife is online now
    Senior Member
    Join Date
    Aug 2007
    Location
    Maryland
    Posts
    19,296
    Blog Entries
    2
    #4
    Quote Originally Posted by Jazmine View Post
    Thanks!

    The reason that we're considering renting is that houses on this street have been on the market for a few months and if we're going to have the house around it might as well be an investment but ideally we'd like to just be done with it and not have the extra hassles of a house in another state/country.
    Look up what rents are in similar areas. If you use a manager, its going to cost you 10-15% of the monthly rent, but they take care of everything.
    Generally, if you are near a base or college, it is easier to rent out. If you rent to military people you will generally find they treat the house better, and are more responsible with the rent. However, you have the issue of the "military clause."
    If you want my opinion on your relationship or life issues, just ask Villanelle!
    Quote Originally Posted by LittleMsSunshine View Post
    I think it's really funny when people come on here, and automatically assume that everyone here is a gung-ho, hoo-rah, i-bleed-red-white-and-blue, kiss-my-military-ass, people-in-uniform-can-do-no-wrong, and i'm-entitled-to-everything bitch.
    "RIP Blackie, and Whitey, New Whitey. Goodbye Poopers and Momma Beige and Lady Grey. New Blackie and the Whitey Sisters rule the roost now!"
  5. Account Closed
    Lynn's Avatar
    Lynn is offline
    Account Closed
    Join Date
    Mar 2011
    Location
    It could be worse.
    Posts
    29,398
    #5
    We owned our home in Florida when my husband joined the military. We sold that house - we didn't have to be at closing, The documents that required our signature we signed and had notarized at the base where we were, and my father had our POA regarding the sale to handle anything else.

    When we PCSed from Ohio, we chose not to sell. My husband knew he would be retiring in the not distant future and we love the area and it has an excellent job market for him for a second career. We have a property manager and he handles everything. He found the tenants (a military member and his family) and they would be in the area for about the same time we will be gone. So it works well for us. Our PM has his own list of preferred vendors for repairs and issues so we've received discounts for using them, however they have no problem using ours, for instance we already had an HVAC company because we had a heat pump installed. We also already had a lawn fertilizing company, things such as that.

    Our taxes were already something we didn't deal with because of investments and other things, so I'm not much help there. I know my husband worked with our accountant and the PM to determine the rent amount so we wouldn't have a lot of tax impact. The price the accountant charges for doing our taxes didn't change though with adding the rental stuff, I don't know if that means anything.

    Overall, it's been positive for us, but we have good tenants, a good property manager and we plan on living in the house again.

    Also, everything is negotiable. We negotiated our PM's charges.
  6. Senior Member
    BLBnJVB3's Avatar
    BLBnJVB3 is offline
    Senior Member
    Join Date
    Feb 2006
    Posts
    9,331
    Blog Entries
    1
    #6
    We have done both. We kept the house for a rental that was the cheapest because we can get it paid off quicker, it doesn't cost much to upkeep, we can afford to carry that mortgage if it is empty, COL there is cheap (easy for us to retire there), and it is where we're from. We have a property manager that handles everything. Seriously. We don't ever need to call him and we don't have to handle the tenant. The only reason the property manager would need to call us if the tenant hasn't paid and their attempts to collect have failed. At that point we call a lawyer and hand it over to them. I've had to evict a tenant when it was just me handling the property. The property manager though has the presence to get it taken care. We are not local so we have the possibility to not be taken seriously. We sold the house that we could not afford to carry the mortgage if it wasn't rented, is much more expensive to upkeep, higher COL, and we have no reason to return there. ETA: forgot about the taxes, we go to H&R Block so I really couldn't tell you. We just keep receipts of anything that is done and give them to them. When I evicted the one tenant I was able to use all the receipts of my expenses from evicting her-gas, lodging, etc. Oh and for our property manager we pay 8% of the rent and it is automatically taken out before the company deposits the rent into our account.
  7. Senior Member
    BLBnJVB3's Avatar
    BLBnJVB3 is offline
    Senior Member
    Join Date
    Feb 2006
    Posts
    9,331
    Blog Entries
    1
    #7
    I suck at answering questions lol. I totally missed some of your other ones. We sold the house before we left. Actually we're still here. We leave next month. Didn't expect for the house to sell so fast. We were under contract 3 days after the house listed. We didn't make it to Open House or even have a sign in the yard. lol We closed last April so we've been in a rental for almost 11 months already. In February we called the realtor to see what she thought we would have to do to list the house. She told us and said lets list in 2-3 weeks. My head spun with how fast the process was. We went from just seeing if it was a possibility/testing the waters to having closed in less than 3 months. For our property manager, he has his own maintenance guy that he sends out. He either fixes whatever it is or calls someone else, from a list he has, to fix it (that is if he can't). No matter what he'll let me know what is going on and how much it will cost. Haven't had to deal with that yet. All repairs we've done were done while I was managing it. In those cases we either called companies up there or had a guy we know that is a general maintenance guy fix whatever it was. The guy we know, we would pay through check. If we had to call in a company then we would pay by debit card over the phone while they were at the house.
  8. Señor Member
    Ashley.'s Avatar
    Ashley. is offline
    Señor Member
    Join Date
    Mar 2008
    Location
    Okinawa, Japan
    Posts
    25,784
    #8
    Are you renting through a property manager? We use a property manager to manage our rental in NC.
    How much responsibility do you have and what is with the property manager if you have one? We basically sit back and wait for monthly statements. We have to pay for repairs that the tenants do not cause (which we have an older home so typically we pay between $20 & $75 a month in repairs with the little things they find. It slows down as time goes on, though. We don't mind. the costs we owe come out of the rent we receive so we don't really have to put up for them since you always have a certain amount in your account that is designated for repairs.
    How much does a rental complicate taxes? I'll let ya know in a month
    Looking back is it worth it to keep a home as a rental? If you are receiving more for rent than your mortgage, IMO, yes. If DH stays in we will probably be back in NC so we won't have to worry about finding a home, because we will already have one that we can move into as soon as the lease it up. If DH were getting out, it wouldn't be for us. Our mortgage is about $800 and we are getting $750 in rent, so we are losing $50 a month... but again it is worth it for us because that ensure that should we ever be stated there again we have a place to go to reasonably quick if not right away.

    Have far ahead of your PCS did you start working with a realtor? As soon as we had solid orders.

    be cool.
  9. Senior Member
    villanelle's Avatar
    villanelle is offline
    Senior Member
    Join Date
    Aug 2009
    Posts
    14,787
    #9
    We rent through a property manager. We pay 7%, which is cheap. Part of that is that % seem to be a bit lower in more expensive areas because the rents are so high that they don't need a high % to make a ton. And my guy is not the most professional dude, but we've been happy with him. He's good at his job, he just lacks a bit of professionalism. He does everything. When our Fridge died, he asked me what color we wanted (since the appliances were already mismatched) and then shopped around for a steal and found oen for us. We did nothing. He collects rent, deposits it, takes care of all maintenance issues, and advertises and screens new tenants if it is vacant.

    The only reason we rented it instead of selling is that it looked like we might be toward the bottom of the market. Our place was down an obscene amount from when we purchased it. We weren't underwater so we could have sold, but we were afraid to sell low and then not be able to afford anything close to as nice (not that's it's fancy--it's a townhouse) when we got back. It's in an area we are likely to return to either via the military or afterwards.

    Prices have come back up a lot, though not all the way. We are waiting to find out roughly when we leave Germany and where we are headed next, but we might end up selling. We've been luck (knock wood) that we've had almost no vacancy time and that our tenants have been responsible. But I know that's not always the case so the whole thing is a source of some anxiety for me. I'd rather not have it to worry about. And since we aren't making money (we are maybe breaking even), it's just not worth it. Our place is worth ~$75k more than we would have gotten if we'd sold when we left, so that's a great return on investment, but I think price increases are going to slow and I'm ready to be done with the house. And DH doesn't want to live in that house again if we do move back. He wants to upgrade to a single family. So owning there allows us to keep up with changing property values in that specific area, but it doesn't really even give us a place to move into if we head back there.

    If we go back to SD for ~3 years (his next orders length), we would start the process to sell as soon as we find out. We'd start showing it toward the end of the current lease and offer her slightly reduced rent to tolerate that and the (hopefully) be willing to go month to month until we sell. It would be great to be done with it before we ever leave Germany, and with little to no vacant time we'd have to pay for. Then when we got to SD, we'd buy. If we don't got back to SD, DH and I will have to decide whether to stay with the status quo because we hope process will continue to go up, or just sell it and not have to worry.

    It does complicate taxes, but not overly so. You will likely have to file 2 state returns (assuming both your states have income taxes), and then on federal you have to list the income and the expenses. Our property manager sends us a statement at year end that has all expenses (his fees and any maintenance or other costs) so the only things we have to add are the HOA (which the manager would pay as well if we opted to have him do it) and the mortgage interest.

    Unless you can make money on the rent (including HOA, mortgage, insurance, property taxes, maintenance, and a large contingency for vacancies, especially in a military town where people tend to move a lot), I would not even consider renting. You do save money on taxes to if that list and the rent you can realistically get are about the same, you'd make a small amount of profit. But for as much possible downside as there is (unpaid rents and evictions and trashing the place and lengthly vacancies), for me, it's not worth it unless you are making a profit even before taxes.
    Science always wins over bullshit. ~Dick Rutkowski

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •