Market Conditions in 91604>Question Details

Mary, Home Seller in Tujunga, CA

Instead of selling in the current down market, is it better to become a landlord and wait to sell?

Asked by Mary, Tujunga, CA Thu Feb 19, 2009

I inherited a house and think the market will be better in a year.

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Answers

11
Yana Galuz’s answer
People will all have different opinions on where the market is going, when will it be stable or go up. The questions to consider is, do you Need to sell it. If the answer is no, then wait and collect the income from it as a rental. If you will Need to sell in the next year or two, I would not wait because it might get worse or stay the same. I would not bet on it getting any better any time soon. That would be my advice.
Good luck and if you have any questions please don't hesitate to contact me directly.

Regards,
Yana Galuz
Senior Associate
Crescent Realty
yana@crescentrealtyla.com

12345 Ventura Blvd. Ste M
Studio City, CA 91604
(310) 595-5522 Direct
(818) 980-5040 Office
(818) 980-5020 Fax
0 votes Thank Flag Link Wed Nov 10, 2010
Hi Mary,
None of us can answer that question with any certainty.
There is a good chance that the market will be worse in a year from now or it could be the same - pricewise.
If you can get a decent amount of income from renting the property then why not keep it as a rental property for the long term ?
The National Association of Realtors estimates that a full cycle of peaks and troughs in the housing market is 16 years. The last peak was 2005 so that would put the next one at 2021.
I just inherited property also and we are selling immediatley as the property needs work, won't get much rent (divided by 8 of us) and we need money now. Hopefully your situation gives you more choices.
Cheers, Liz
1 vote Thank Flag Link Fri Feb 20, 2009
Many take this route however can you afford to lease your home and still cover your mortgage payment? Confer with CPA you do receive tax benefits regards to investment properties

Lynn911 Dallas Realtor & Consultant, Loan Officer, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
972-699-9111
http://www.lynn911.com
0 votes Thank Flag Link Wed Nov 10, 2010
I would wait to sell and become a landlord as a last option.
Web Reference: http://www.golftobeach.com
0 votes Thank Flag Link Wed Nov 10, 2010
Thank you for your question about selling your property in a down market. Trying to hold onto a property so that you can time a sale or wait out the current economic cycle is not a good idea because as previously mentioned, there is great uncertainty in the market right now, even though there are signs it is reaching bottom (see my blog post).

Since there is great uncertainty about the market trying to wait until a recovery happens is a bad idea because no one knows when it is going to happen.
0 votes Thank Flag Link Wed Nov 10, 2010
No one knows exactly where the market will go! I think renting or selling depends on your situation. Could you use the money now towards a better investment? Or will the rent be a nice additional income that may allow you to wait for the market to get better? Did you inherit a mortgage? If you can get qaulified, serious renters than becoming a landlord may work well for you...but beware that you have to have the time and patience to deal with tenants such as fixing repairs (Which can be costly). There is no right answer...it really depends on your personal situation and how you would use the money if you sold the house today.

Best,

Julie Kryukova

310.402.8181 Please feel free to contact me with any more questions.
0 votes Thank Flag Link Mon Nov 8, 2010
If you don't have any mortgage on the property I would definitely recommend you to rent for couple of years and than sell.
You probably make more money in the long run, these days investors are looking for deals and if your property is not a deal they will not buy it.

Rent it.
Web Reference: http://homesinsale.com
0 votes Thank Flag Link Fri Jun 12, 2009
Oustanding question.

Keep the home and rent it slightly below market on a longest term possible. You may likley find yourself collecting rent at the higher amount in as little as one year - ANOTHER OUTSTANDING QUESTION GETS THE THUMB
0 votes Thank Flag Link Sun Feb 22, 2009
Hi Mary:

If you are going to buy another property in the same area from the sale proceeds of the iherited property then it is better to do it now for the following reasons.

1. The property taxes of the new property will be lower than if you were to buy it when the market has risen.
2. The down payment and the loan amount required for the new property would be lower now than if the market was rising.
3, The interest rates are very low. This is a unique situation because if you remember the market in the late 70s and early 80s, when the real estate prices dropped interest rates had risen to as much as 18%. Now you have a rare occurence of low prices with low interest rates.
4. You have a bigger inventory of homes now than you can expect with higher prices and hence, a better choice.

Since you inherited the property you must check with your accountant/attorney what the cost basis at inheritance would be and the extent of capital gains you would have to pay, if any.

Bob Khalsa, CCIM
Broker Owner
United America Realty
bobfoxbat@gmail.com
661-313-6107
0 votes Thank Flag Link Thu Feb 19, 2009
If you don't have to sell, don't!: Is a good rule of thumb for present market conditions. Hold on to that property and find a good tenant. You'll benefit in the long run.
Web Reference: http://www.c21ab.net
0 votes Thank Flag Link Thu Feb 19, 2009
Hey Mary,

I think and hope it will be better in a year. If your not looking to purchase another property with the funds from your inherited property than hold on till the market improves. If you are thinking of purchasing another property I think now is the time to do so as prices are low and interest rates are low which gives you more buying power. If the property is in Studio City than your lucky as that area hasn't been hit as hard and is very desirable.

If you decide to lease or sell, let me know as I'd be happy to assist you.

Thanks and best,

Monique Carrabba
The Carrabba Group
Keller Williams
monique@thecarrabbagroup.com
323.899.2900
0 votes Thank Flag Link Thu Feb 19, 2009
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