Real Estate dilemma and advise needed

Q

QuickSilver

SF VIP
Location
Midwest
About 10 years ago, Hubby and I paid cash for a home in Northwestern Illinois around the Galena area. It's VERY rural and the countryside is beautiful.. Our intention was to sell our city house and move out there when we retired.. Well... after spending time in the country, we both came to the conclusion that country living was simply NOT for us.. So much for "Green Acres".. huh? We have decided to fix up our city home and stay here.

We put the country house on the market 2 years ago.. First of all.. it was way over priced.. and we (stupid city folk that we are) paid way too much for the house to begin with... It seemed like a bargain based on the Chicago market.. and now we find out we were "HAD"... lol!! Oh well... live an learn. We both made lots of money on good real estate transactions in the past,.. so It was time to take a hit I guess.

ANYWAY.... no luck until recently when we reduced the price to $10K below what we paid!!! All we have is a contingent deal signed.. So the prospective buyers have to sell their house first.. and the market just isn't that good out that way. It really hasn't recovered from the crash I guess.. The chances are pretty good the deal will not go through.. if they can't sell.. or can't sell in time.. I do have a "bump" clause so I can still accept better offers.. but those haven't been coming.

So here's the question.. I was thinking that perhaps a "rent with option to buy" deal might be better.. or simply renting it out. I am not unfamiliar with being a landlady.. I have owned income property. This would at least cover the property tax out there.. and give me a bit of an income... It also would have the tax benefit of being able to write off the expenses.. However, I know that if I start depreciating it, I will take a hit when I sell for capital gain..

I simply CANNOT reduce the price any lower.. I would have to give it away, and I'm not about to do that.

What to do... what to do?? Any insight?
 

I'm thinking at this point that may just be the way to go. At least the financial burden would be off my shoulders.
 

QuickSilver said:
About 10 years ago, Hubby and I paid cash for a home in Northwestern Illinois around the Galena area. It's VERY rural and the countryside is beautiful.. Our intention was to sell our city house and move out there when we retired.. Well... after spending time in the country, we both came to the conclusion that country living was simply NOT for us.. So much for "Green Acres".. huh? We have decided to fix up our city home and stay here.

We put the country house on the market 2 years ago.. First of all.. it was way over priced.. and we (stupid city folk that we are) paid way too much for the house to begin with... It seemed like a bargain based on the Chicago market.. and now we find out we were "HAD"... lol!! Oh well... live an learn. We both made lots of money on good real estate transactions in the past,.. so It was time to take a hit I guess.

ANYWAY.... no luck until recently when we reduced the price to $10K below what we paid!!! All we have is a contingent deal signed.. So the prospective buyers have to sell their house first.. and the market just isn't that good out that way. It really hasn't recovered from the crash I guess.. The chances are pretty good the deal will not go through.. if they can't sell.. or can't sell in time.. I do have a "bump" clause so I can still accept better offers.. but those haven't been coming.

So here's the question.. I was thinking that perhaps a "rent with option to buy" deal might be better.. or simply renting it out. I am not unfamiliar with being a landlady.. I have owned income property. This would at least cover the property tax out there.. and give me a bit of an income... It also would have the tax benefit of being able to write off the expenses.. However, I know that if I start depreciating it, I will take a hit when I sell for capital gain..

I simply CANNOT reduce the price any lower.. I would have to give it away, and I'm not about to do that.

What to do... what to do?? Any insight?
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We have a little house and a two suite house that we rent out, and to be honest, we regret that we ever did it. We've had good tenants and we've had a couple of real stinkers. The worst stinker still owes us a couple thousand but we wrote that off after we finally got rid of him and his wife. Then there's the pain of having to do repairs when your tenant calls to say the roof has a leak or there is a problem with the plumbing or (name a zillion potential problems). Last year we made a big fat ZERO on both properties because one absolutely needed the bathroom redone to protect the rest of the structure from a bad leak in old pipes and the other needed half the roof replaced. And that doesn't even take into account the uncomfortable issue of trying to find good tenants. We've been trying to sell one of them for three years with absolutely no luck. Very depressed market in that town.

On the other hand, a friend of ours had a house in the same little town that he couldn't sell until he found someone who was interested in a lease to own situation and so far, three years, that's been working out pretty good for him. If I were you, I'd try the rent/lease to own but make sure you research how to do it in the safest manner.
 
Debby said:
We have a little house and a two suite house that we rent out, and to be honest, we regret that we ever did it. We've had good tenants and we've had a couple of real stinkers. The worst stinker still owes us a couple thousand but we wrote that off after we finally got rid of him and his wife. Then there's the pain of having to do repairs when your tenant calls to say the roof has a leak or there is a problem with the plumbing or (name a zillion potential problems). Last year we made a big fat ZERO on both properties because one absolutely needed the bathroom redone to protect the rest of the structure from a bad leak in old pipes and the other needed half the roof replaced. And that doesn't even take into account the uncomfortable issue of trying to find good tenants. We've been trying to sell one of them for three years with absolutely no luck. Very depressed market in that town.

On the other hand, a friend of ours had a house in the same little town that he couldn't sell until he found someone who was interested in a lease to own situation and so far, three years, that's been working out pretty good for him. If I were you, I'd try the rent/lease to own but make sure you research how to do it in the safest manner.
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I would certainly let a real estate person handle it.. including the background and credit check.. I'd gladly pay for that peace of mind.
 
QuickSilver said:
I would certainly let a real estate person handle it.. including the background and credit check.. I'd gladly pay for that peace of mind.
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Absolutely! My old boss decided at one point that the company that was handling the rental property was costing too much, and that because it was "easy" I should handle it. It was an absolute nightmare, and after one kind of scary incident while I was showing the property, I announced that it was either get a realtor or get a new paralegal. Boss chose the realtor. Managing rental property is a monumental pain in the rear end, and definitely isn't "easy."
 
Back in the "old days",a lease option was backed up by a fat earnest money deposit. Enough cash to make any repairs that might be needed if the tenants should end up deciding not to exercise their option. But nowadays so many properties can be purchased without a downpayment at all-or less than what a deposit would be-that I don`t know if you could really collect enough of a deposit to protect yourself.
 
Mrs. Robinson said:
Back in the "old days",a lease option was backed up by a fat earnest money deposit. Enough cash to make any repairs that might be needed if the tenants should end up deciding not to exercise their option. But nowadays so many properties can be purchased without a downpayment at all-or less than what a deposit would be-that I don`t know if you could really collect enough of a deposit to protect yourself.
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I have to confess that I have no idea how a lease with option works.
 
Just sell it. There's an old saying in the real estate industry that "Price cures everything". Take your lumps and lower the price until you find a buyer. btw, btdt.
 
I think you rent it out, as you have already mentioned that you don’t want to sell it out on lower price. So, its better you should go for rent it out through which you will get income as well. Yes, but you can inquire about your renter very well. Or, another option is you can hire some real estate person who will help you to find good buyer or a good tenant for your house.
 
Renting it out might be a good option. Or maybe you should wait a few years more. Do you know about a property market cycle? If you don't, check this article https://tranio.com/traniopedia/tips...ow_to_choose_the_best_moment_to_buy_property/ .The average length of a cycle is 7-9 years.
It seems like it is not the best time to sell a house, you need to wait until the moment when expansion is tapering off or the market is about to peak. The difference between prices would be significant.
 
NancyM said:
Renting it out might be a good option. Or maybe you should wait a few years more. Do you know about a property market cycle? If you don't, check this article https://tranio.com/traniopedia/tips...ow_to_choose_the_best_moment_to_buy_property/ .The average length of a cycle is 7-9 years.
It seems like it is not the best time to sell a house, you need to wait until the moment when expansion is tapering off or the market is about to peak. The difference between prices would be significant.
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I spoke with our realtor and she does handle rental agreements.. including screening the prospective tenants. She is confident however that the present contingency contract will work out.. I'm not so sure. The buyers have to sell their house.. and houses in that region are hard to sell.
 
The market here is pretty stagnant. There are houses in my area that have been on the market forever. Prices are high and it seems nobody has any money to buy. People who have managed to unload their houses have had to lower prices drastically and have taken quite a hit. Hopefully the market will pick up soon.
 
Well, I'm down to $10 grand less than I paid for it... PLUS I put on a $10thousand dollar roof a few years ago.. Only bright spot is that I certainly will NOT be paying any capital gain tax if and when I do sell
 
QuickSilver said:
Well, I'm down to $10 grand less than I paid for it... PLUS I put on a $10thousand dollar roof a few years ago.. Only bright spot is that I certainly will NOT be paying any capital gain tax if and when I do sell
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Way to look at the bright side!
 

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