If the home is paid for yes rent it out that way you have positive cash flow coming in every month.
Or if you need to sell it and in need of money, try putting it on the market for a few months to see what kind of an offer you will recieve.and if it not what your looking for just rent it out for the time beening.
any questions please contact me @ Robert Sanchez R.E.Agent mobile 619-867-4543

Hello Mr. David, have you hired a License Realtor/Broker ? If not, I am interested to be interview by you and your mother-In-Law, for a Free Consultation with NO commitment or obligations.
Keep me posted if I can be of Professional Service.

Ruben Sanchez: License/Realtor-Mortgage:Broker

Hi David, It definitely depends on her ultimate goals and what she wants out of the property. If she rents the property out - she must have owned and lived in the property as her main home for at least 2 years during the 5-year period ending on the date of sale to get her tax write-offs. See IRS publication 523 for more details: http://www.irs.gov/publications/p523/index.html. If she converts to a permanent rental, then she could defer taxes by doing a 1031 exchange as Michael mentioned in his reply. I've done an exchange for myself and it was pretty painless. A 1031 exchange company takes care of what's needed - you just have to watch your dates since there are some timing issues. This has to be done BEFORE the sale. Check with your CPA - if you don't have one, I can recommend one in SD.

Hi David,
No one knows how long it will take to the market to recover. Is the custom home on 3 acres the highest and best use for the land? Would it have more value to an investor/builder? Due to your mother-in-law's age I would consult an attorney and a CPA. Know all you options.

David, Your a good son! Now be a better son by considering the following: If your mother's home in El Cajon has apprciated significantly she may wish to consider a couple of different strategies. If the price of the home is way beyond the $250,000 tax free foregiveness after considering her basis try this: think of renting the property for more than a year. She can then move back into the home, sell it, take her $250,000 tax free money and then "exchange" the balance into property held for investment/income generation. The whole transaction could be completely tax "deferred". Obviously check with a CPA regarding this strategy.
As far as holding for two years I think you're lookign beyond that! The whole foreclosure mess is going to take at least that long to work out. Then we get to do it all over again! Last time we came off such a market the southern california market took 8 years to recover. A web-site to monitor for changes in the market is the Office of Federal Housing Enterprise Oversight http://(www.Ofheo.gov) as they use "appraisal" information to determine price fluctuations and trends. Good luck and thanks for taking care of MOM-in-law!

I've had a lot of older home owners sell their ancestral home in my years in this business. Generally the home is free and clear which in your case would be a tidy sum. One thing that I have found is that they don't like to hear the phrase "wait until". If your Mother in law has had the home forever, the increase in equity she would realize is minimal compared to what she must have paid. You didn't mention what she planned to do with the equity but what ever it is she deserves to enjoy it all in the few years she has left.

I agree with Vicki, donot determine your Mother-In-Laws selling of her home just based upon the market alone. There are many other variables to consider. The current Market value is only one of them, Also who is to say what the actual market is like in her community. Talking to a Local Realtor can give you some information about her specific market. Maybe houses are not dropping a considerable amount in price.

Best advice always contact a professional, and get some hard numbers not the media's take on the market.

In her situation i would strongly suggest talking to a CPA, and make sure you ask them also what are the tax concerns making a property a rental. If you decide to sell an investment property in 2 years compared to a owner-occupied proprty today there could be huge tax concerns.

It depends on where she's planning to go, what she'll be doing and how her health is. Does she have other money available for her living and possible health-related expenses that may arise in the meantime? Is it going to inhibit her from doing the things or going the places she'd like to?

How long has she owned the property? If she sells now will it enhance or hinder her current living situation? Will it ease her mind to have the extra money easily accessible? Can she rent it for enough to take care of a new living situation and her other needs? How does she feel about renting it? Who will manage the property as a rental? Does she have a CPA or personal attorney that she can take this issue to for their advice?