Real Estate Guru's....Is this a stupid idea???

[maverick2112]

Should I sell or use it as an income source??

I own a house with my sister we were going to sell. She needs the $$$ worse than I do. But instead of selling it for about $175,000 and splitting the proceeds. Someone told her we would be better off to just rent it for the next say 10 years at $1250 a month......

then go the the bank and get a loan for about $100,000 then split that and use the rental money for the payment. Then at the end of 10 of 15 years we both get $50,000 and still owe the property.

Now I am pretty sure the property value will not go down ......its in a good area and houses have held there value well the last 10 years( really appreciated a lot)

We put an add in the paper for possible renters and their were 5 calls in one day. There is a shortage for rental houses in the town for a four or five person family.

Is this a good idea or should we just sell it??
I know it may be a pain to put up with renters but I only live a few houses down so I can keep a very close eye on things.........

Any advice........

 

[Jawz]

Not a guru, but a rental owner. I think the renting is the way to go in your situation, assumming your able to secure some good long term tenents... Plus you'll be able to save more with write offs..............


Just my opinion......

 

[Superman]

If you can keep the property that's the way to go....How much do you owe on the mortgage?If you don't owe anything that's a homerun....If you do sell talk to your acct. prior to give you a head up on what you might be paying for taxes on the sale of the property....it might be best to keep and rent...

 

[maverick2112]

If you can keep the property that's the way to go....How much do you owe on the mortgage?If you don't owe anything that's a homerun....If you do sell talk to your acct. prior to give you a head up on what you might be paying for taxes on the sale of the property....it might be best to keep and rent...

Nothing owed...........and checked with my acct and he said I get a sale of 1 home tax free if it is under a certain amount. I am sure if the home was worth 3 million or something like that then taxes would have to be paid.

 

[skulldog]

Unless the property was part of an estate or your primary residence 2 out of the last 5 years, then you are going have to pay taxes. What would you do w/the $$ if you sold it? What about buying your sister if she needs the $$ that bad?

If she doesn't then I'd keep it and try being a landlord(after you've the law first!!!), if it doesn't work you could always sell it!!

Gl

P.S. I've never heard the phrase" You get to sell house for free" and I've been in the RE business for 18 years