need professional advice!! (Realtor, foreclosure, short sales, tenant)
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Hi- My husband started a job in DC. While he is renting an apartment there, he comes home (suburb of Philadelphia) on weekends. This is getting very old for all of us...me, him and our 5 yearold.
So, we decided that end of summer, we should move him in FairFax County, VA.
HOWEVER-WE HAVE TONS OF QUESTIONS THAT WE NEED ANSWERS TO..HERE GOES MY LIST...
1-Should we sell or rent our house here? We figure our house will go for approx 210, 000 (if we are lucky in this job market) We have a sellable house, however. My mother in law keeps saying that for tax deduction purposes we should not sell our house but in fact rent it ...especially if we decide to rent at first when we get to VA.
The problem is that our rent would be too high in our area...currently our mortgage is almost 1600.
We feel that renting is an opening for a lot of headache.
2-If we are not interested in keeping our house as investiment property that we feel we should just get it out of our hands, no?
3-If we were to rent, doesn't make it that much harder to sell in the long run (especially long distance)
4-Are there any tax benefits if you take less than the actual mortgage as someone's rent...in other words, if it is so hard to find someone to rent for our asking price, and we get less, are there any benefits to this?
5-Given the market in VA, (one of the most expensive areas to live), does it make sense to buy instead of rent even if we decide to move in a year or two...ideally we would like to find something affordable and stay as long as the school district is good. Since here in PA we really could afford only 250-300,000 max- house HERE and down in VA houses are SO SO much more expensive, we were going to look at a foreclosure list. What is your professional opinion on foreclosures and are they good for a family in our shoes...And at this time?
The problem is that our rent would be too high in our area...currently our mortgage is almost 1600.
We feel that renting is an opening for a lot of headache.
Do you mean the rent you would receive for the house would be too low..that it wouldn't cover your mortgage payment?
As for selling while renting...unless it makes financial sense for an investor to take over the property, then yes, it's going to hinder you selling the house. You also run a risk of expenses due to damages and a tenant that doesn't pay their rent leading to eviction. Make sure you know the laws about that in your state and county. They are different everywhere. Make sure should worst come to worst that you know how long it takes to get someone out of the house if they aren't paying and that you can afford to carry the payments on your own. Plan for the worst, hope for the best.
As for tax benefits, you can write off expenses for having the property..repairs and such, but then again, you would have to declare the income.
Forclosures, meaning properties already foreclosed on and are now bank owned, can be great investments. There are horror stories about the condition of them but that depends on where you are and what the market is like. Have you investigated this with a Realtor®? You can just call them and start asking questions. The more bank owned properties in the area, the more likely you will find one in very good condition...although it sounds like you might be going to an area that isn't having that kind of an issue.
Short sales are a different story altogether.
Your focus should be selling your home in PA first before buying anything in VA. If you planning on moving to Fairfax, rent a house or apt there until your home in PA sells. It doesn't sound like you have any experience being a landlord and being an out-of-state landlord is even more headaches plus costlier because you'll now have to hire a manager.
1. Sell
2. Yes
3. Yes. Renters don't want to move. Harder to show as making appt's with renters, and DON'T let the renters talk to potential buyers. They don't want to move, so they'll try to sabatoge the sale. Have a funny story on that one!
4. Ask a CPA
5. Tricky- Move to NM, it's not as expensive and we have better weather!
Really, if you don't know if you're going to move in 1 or 2 years, there are tax consequences if less than 2 years on a profit if you sell again. call a cpa, but, forclosures can be good deals. I got a screaming deal myself. House worth 120K- 6 yr's ago, people I bought it from got it for 20K, I paid them 40K. I'm sitting on nothing but equity. They made money, I got a killer deal and we're all happy!
THANKS everybody!
You call confirmed what my gut tells me...sell not rent and try to find a foreclosure deal!
Just to add...we thought that since you get a better tax break...we thought we should, if we can, buy right away if the price is right as opposed to rent.
Keeperk, You mentioned move to NM instead of NOVA...do you mean northern MD? We decided VA because it is a better job market.
commuting from New Mexico will be fine in the future when they work the bugs out of the teleportation device : ) Until then we are stuck with the normal modes of transportation....
PA Family, unless you're very familiar with N. Va, I'd rent first for a year. You're correct that owning a home with give you more tax deductions, but if you pick the wrong area and your commute is huge, it might cost you more, especially if you then realize there was somewhere else you could have moved that would have reduced your commute. Personally I think you can find great deals without messing around with foreclosures plus homes in foreclosure are usually in worse condition.
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