Home Selling in Higley>Question Details

Pv2715, Home Seller in Arizona

Relocation buyout AZ

Asked by Pv2715, Arizona Tue Nov 4, 2008

We currently own a home in AZ. My husband has been offered a relocation corporate buyout to move to
Dallas, TX with his new job. We had bought our home in az when the real market was at its peak in 2005. With that said, we are expecting to incur a lost of almost 25%. Not sure if we should accept the buyout offer and incur the loss or put the house on rent for a while and wait for the market to rebound.
Gurus please advise...

Help the community by answering this question:

Answers

6
Keith Sorem’s answer
PV
I've been in the same situation.
I would encourage you to talk with your CPA regarding the tax consequences not only while it's a rental, and then when you sell it.

There have been significant changes in the IRS rules for non-owner occupied investment property. The principles of appreciation and tax deductions are still valid. In the long term I strongly recommend investment property...buy and hold, not buy and flip.

I became an accidental investor, and at the time had not real clue what we were doing. Please feel free to contact me directly for specific questions.
0 votes Thank Flag Link Wed Nov 5, 2008
Keith Sorem, Real Estate Pro in Glendale, CA
MVP'08
Contact
I've written about this choice on my blog in the past. It's a complicated decision, and rather than rehash the entire thing, I'm offering a link to my blog. I'm not going to say this post covers everything you should consider in making this decision, but it should at least cover the heavy hitters.
0 votes Thank Flag Link Tue Nov 4, 2008
Another possible aternative would be to have your husband see if the company would make up some or all of the amount of your loss on your home as part of the relocation package. We do several relocation listings each year and recently the sellers have all been in the same situation as you and your husband. Sometimes the company helps out and sometimes they don't. But it doesn't hurt to ask the company to do something. Good luck.

Rick Dobbles
0 votes Thank Flag Link Tue Nov 4, 2008
Excellent question!

A few questions to ask yourself:
1. Do you want to or will you buy a home in Dallas? If so, you may find it difficult to buy another home unless you have at least 20% equity in your existing home. Consult a lender for more information.
2. If you rent the house, are you comfortable being a long distance landlord? If you turn the house into a rental, you should intently consider hiring a property management company. And consult your accountant regarding the tax consequences of having a rental property.
3. If you keep the house, to make up a loss of 25% in equity, it could take quite a long time for the market to rebound to be able to sell the house & not take a loss.

Hope this information helps.

---
PAUL WELDEN
HomeSmart Real Estate
0 votes Thank Flag Link Tue Nov 4, 2008
Great question!

How much does owning this home in AZ affect your purchasing power in Dallas?

Do you have equity in AZ you need to buy in Dallas?

Are you suited to be remote landlords?

Do you think you might return to AZ and want this home?

How long are you willing to wait for this market to recover?
Web Reference: http://www.McVinua.com
0 votes Thank Flag Link Tue Nov 4, 2008
You may want to ask yourself, which option are you most comfortable with? Not everyone is suited for being a long distance landlord. There is however the option of having a property management company oversee and handle the leasing for you.

An appropriate person to ask would be your accountant. Gather all the figures needed and evaluate which option will be suit you financially.

Good luck!
Web Reference: http://www.jameswehner.com
0 votes Thank Flag Link Tue Nov 4, 2008
Search Advice
Ask our community a question
Email me when…

Learn more

Copyright © 2015 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer