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Anita, Other/Just Looking in North Carolina

Should I rent or sell my home if deployed? Pros and cons of each

Asked by Anita, North Carolina Wed Apr 23, 2008

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Anita:
Some great answers to ponder. I just want to thank you for all that you do for the US. Good luck and health.
0 votes Thank Flag Link Wed Apr 23, 2008
Hello Anita, I too am military and was active duty. We were faced with the same dilemma on multiple occasions. Whether to keep this property as a rental or to sell it depends upon your level of comfort with risk. Here's the question - If your property were to go vacant, how long could you make the payment without receiving rental income? Secondly, if the property were to go vacant and you had to make repairs in order to secure another renter, would you be able to do so? If the answer to both of these questions is YES and you are comfortable with taking risk, then perhaps you could have a successful investment experience provided you could find a great property management company. If the answer to these questions is NO, then you probably should sell. You do not want to damage your credit because you could not make the payments during any vacancy in the property and perhaps damage your military career because your commanding officer is being contacted due to lack of payment. I had an out of state investor that bought properties all over the country and she has had to get help from me and other real estate professionals to negotiate with the banks to accept less than what is owed on them rather than go to foreclosure. My goal here in answering this question was to help you make an informed decision and I hope that I have done that for you. Good luck and thank you for serving our country!!!!
0 votes Thank Flag Link Wed Apr 23, 2008
If you have someone you can trust to manage the rental and screen the prospects very well, you could build equity assuming that the rent will be within $200 of your payment. Cons: Within 2 months, some tenants damaged the home with pets and rough use and cost me $1500, which was more than the rent paid.
0 votes Thank Flag Link Wed Apr 23, 2008
Hello Anita

Is your home located close to your family or friends, so that they could help oversee your renters,..,if yes, then I would recommend renting it and using the rental dollars to pay for your asset, but if not, then I believe you open yourself up to the potential for a lot of damages and losses from renters nor paying their rent. If that is the case, then sell it!
Web Reference: http://ellenbaker.net
0 votes Thank Flag Link Wed Apr 23, 2008
Pros: Tax deductible interest from your mortgage payment, the ability to write-on any repairs and managment expenses, equity appreciation while the tenant is paying down your mortgage
Cons: Finding a good property managment firm, having to pay the mortgage payment yourself if there is a problem with finding a tenant or if an eviction occurs, security deposits that will not cover damages

A question for you is... Are you intending on moving back into the house when you come back or are you looking to start investmenting in rental properties? If you like the house and have equity built-up and a low interest rate, I would say keep the house and rent it. You can always sell at a later date and if everthing goes well you might have a little extra income each month from the rental.
0 votes Thank Flag Link Wed Apr 23, 2008
As a Marine Corps veteran being face with the same decision several years ago in AZ, I elected to sell because I knew I would be gone for at least 3 years overseas. I didn't have family to watch it for me or a relationship with a reputable Management Company. If your only going to be gone for a short period of time and have someone you trust to manage it, I would hang on to the property.
0 votes Thank Flag Link Wed Apr 23, 2008
If your home is located in a depreciating market (AKA - buyer's market), and you can afford to keep the property, keep it and rent it out. On the other hand, if you're in an appreciating market, and you have any concerns about the affordability of maintaining the home while you are deployed it may make sense to sell it. Good luck to you.
0 votes Thank Flag Link Wed Apr 23, 2008
I would keep this. It is an INVESTMENT. If you want to retire early, you should build on this one and get another one. If you rent this, keep in mind if you claim capitol gains, you have to pay taxes on that for the original price you paid for that home when you go to sell it. Hope this helps. Sheri Mapes the Cincy House Expert!
0 votes Thank Flag Link Wed Apr 23, 2008
As an active investor I would consider holding onto the property as a rental. If you have friends or family in town they may be able to help you manage the home while you are away protecting our freedom. In the event that you don't have anyone personally who can help with this process, a good Property Management Company is worth its wieght in gold.
The advantage of holding onto the property is that you can have someone else paying down your principal balance on your mortgage, and at the same time enjoy the tax benefits of the interest write-off. Real wealth can be created long term, for instance, imagine what your property might be worth 15 years from now and think about how much you would owe.
0 votes Thank Flag Link Wed Apr 23, 2008
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