What are the advantages of renting out versus selling my home?
I am in the process of purchasing a new home to live in. My existing home is in a neighborhood where places sell and rent out rather quickly. I have equity in the home equal to about 1/2 of the current value of the home. I am thinking about selling. Some people think I should rent it out. What are the tax advantages of renting it out? I still have a mortgage on it. Can I write off any of the interest on the mortgage? If someone can direct me to a good book or website to help me out, that would be wonderful. Thanks!!7 years ago - 4 answers
Check with a tax professional for any tax advantages, but I don't see any reason why you wouldn't be able to continue to write off the interest. You would just have rental revenue to declare. However, a better question for you to ask is whether you want to be a landlord? I've read horror stories online about people coming in and trashing rental places and then just leaving in the middle of the night.7 years ago
Can you get enough rent cover to your old mortgage, taxes, trash,water, sewer,upkeep, repairs, etc? If yes, it sounds good. Let them pay your mortgage for you. After first full calendar year, the depreciation will reduce your rental income and give you more net cash. Make sure you get a good security deposit and require the tenants to cut the lawn, do snow removal etc.by Dr. Deth - 7 years ago
Yes if you rent your house you can deduct the mortgage interest. Also depreciate the property for tax purposes. You can write off expenses. If you sell the house later then the depreciation is recaptured and you will have to pay capital gain. Renting a house is not a good thing because if they do not pay the rent it will take up to 6 months to get them out, plus all the work that will have to be done to house after they move. If you want to profit on the house the only way to go is to sell it to a tenant/buyer. Sell as a lease option, purchase option or anything likie that. Why: usually someone takes care of the property better aand if they don't buy it you can resell it again. Check with a lawyer in your state for the guidelines.by echo2uuc - 7 years ago
obviously there are pros and cons to renting. renting is not a bad thing when you have a good tenant. yes there is some horrible stories about renters but there are just as many success stories too. the real question really is do you want to deal with being a landlord? if you find a good tenant then renting would be the way to go. the property is still appreciating and the mortgage is being paid and hopefully you'll do much better then breaking even. you could then use the equity to purchase more property and build your wealth.by Leroy M - 7 years ago