Hi Desert Real Estate Forum

With current market conditions lending themselves towards a buyer’s market the question becomes is it better to leave your home vacant while trying to sell, or rent it. While renting your home presents its own set of problems, such as tenant damages, there are many benefits to using your home as a rental.

The seller retains their capital gains exemption if they have occupied the property for two of the last five years. So there is a three year window for rental opportunity while the seller waits for the market to come back.

Even if rental income doesn’t cover the entire monthly burden, it can greatly reduce the negative cash flow. While not all sellers will be in a position to carry the negative, a seller that can manage can reap benefits upon market correction.

Any repair or improvement cost is tax deductible once the home is rented. This can provide opportunities for improvements while getting a break on taxes.

Finally, an empty home is difficult to insure and may become a target for vandals.

Being a landlord is not for everyone, there are many pitfalls and risks, but given the right situation a seller may be able to take advantage of the positive aspects of rental ownership while riding out this market and ultimately recover some, if not all, of their lost equity.