Renting for Monthly Loss Could Result in Long-Term Gain
I received an email from a reader in Santa Barbara County, Calif., regarding the sale of her house that, once selling fees and closing costs are paid out, she would have to come to the table with a check to get out of the property.
“Right now, I believe my house to be worth around $550,000. I need to move, and cannot decide whether selling at a loss, or leasing out for a couple years is the best move,” she writes. “There are still many properties on the market in my town. I will only be able to recoup a little more than half of my [monthly] payment in rent each month.
“If I can afford to make up the difference for a year or two, would it be better to wait and sell when it has appreciated more? Right now, I would have to incur a loss just selling, as I would not even cover the costs of the Realtors fees. And the loss would not be tax deductible, as opposed to turning it into a rental and then deducting all losses next year or in the next few years. I am not a real estate investor, just a person with a house to sell because I am moving.”