We take phone calls almost every week from different people asking for advice and our opinion. We have been fortunate enough to be designated as trusted Los Feliz Real Estate Agents.
Along with that comes a lot of responsibility to help people make good decisions and route them to the correct people when it comes to expertise outside of our field.
People often ask, should they sell their house or should they lease it?
Of course, this is a difficult answer and it’s not the same for everyone. Along with leasing your home, comes certain responsibilities and risks. Because leasing can be very complicated, our Los Feliz Real Estate Agents often suggest a property management company or someone that has the expertise in this area.
For some people who need to get their hands on cash, our Los Feliz Real Estate Agents might recommend to speak to an advisor regarding a reverse mortgage or a refinance before selling.
In some cases, selling is the best alternative. Let’s suppose, for example, you are 90 years old and you really don’t need the equity in your home right away. You have now decided to either live close to your children or move to an assisted living community and the income would come in quite handy.
On the surface, it appears your best bet would be to lease the house, particularly because you don’t need a large chunk of cash and you do need the income to support the overhead that you will be facing in the assisted living home.
It can get very expensive of course, depending on the assisted living care you choose. Also, there may be tremendous tax benefits to the estate leasing a property temporarily versus selling it immediately.
On the other hand, if you are a widow or widower and have received the benefits of a stepped-up cost basis recently, you may not have to worry about taxes at all. There might be a reason why you would sell versus leasing.
Now, let’s suppose both of you are fine and you are both in your 90s. Neither one has passed away and you do not have the benefits of a “stepped up” cost basis. On another case, let’s suppose you are a widow and your husband passed away 15 years ago.
Thankfully, the market has increased tremendously in the last 15 years, but it is also going to hurt you when it comes to paying taxes.
When you are no longer here, your estate will probably be able to sell the property without paying any taxes, except in a case where the size of the estate is significant. And then, of course, tax laws can change at any time without notice.
Our Los Feliz Real Estate Agents would certainly suggest that you get some legal and tax advice. In addition, make sure to speak with a knowledgeable Los Feliz Real Estate Broker. Each will guide you within the scope of their own expertise.
Get the legal, tax, and real estate information, call the appropriate parties and become well informed before making a commitment on whether to sell or lease.