Friday, October 23, 2009
Renting or Selling Your Home?
by Jameel Murray
Because of the current state of the economy that witnessed the sudden decline of property value, many homeowners are faced with a difficult decision, which consists of renting or selling their property. Both options pose significant benefits for the homeowner, but there are also some daunting tasks that homeowners may have to face. If one decides to sell their property, it may generate a great amount of profit that may be used to purchase a new home. However, attempting to sell a home in this current economy may seem like a very difficult thing to accomplish simply because no one is purchasing real estate at this moment.
If a homeowner is not able to sell their property, they can also rent the property out to renters. If your home is in great shape and conveniently located, finding renters may not be a difficult task. The goal of renting is to produce monthly rent to cover expenses such as mortgage, insurance, and property tax. After a considerable length of time renting, homeowners can use the rent as another source of income. Of course there are some cons to renting which includes maintenance and taxation. Maintenance costs are the sole responsibility of the homeowner. If a renter decides to destroy your home, not only does it depreciate the value of the home, it also increases the homeowner’s expenses. Rent is usually taxed as an ordinary income. The tax on rent is gradually higher than the capital gains tax rate. Even though the option of renting does have some downfalls to it, a homeowner may need to seriously consider the option.