One of the more difficult decisions adult children have to make is what to do with a house that their parents are no longer living in. Maybe your parents have gone into an assisted living facility, or perhaps they have passed on and you’re not sure whether you should rent or sell their house. This situation has occurred several times for our clients in the last year, and our first recommendation is always to talk to your CPA. There are definite tax implications involved in anything you do with that Santa Cruz property, so you’ll want to be aware of what the benefits and consequences might be.
Deciding to rent the house is often a really good option, especially if your parents are still alive and being cared for in an assisted living facility. Rental rates have been increasing quite a bit with the rental market tightening up. The extra income you can get from renting out your parents’ home will help you offset what they might be paying for their long term care.
When you rent that property out, you’ll still have the home available. Renting it out for a few years means you can decide what to do with it later on down the road, when your parents pass away and you’re dealing with all sorts of estate matters. You can carry out the terms of your parents’ trust; if that’s the way you have the property set up.
At Portola Property Management, we think renting the house out instead of selling it right away is a good option. It allows you to buy time, and you’ll always have the option to sell the house at a later time. It’s also favorable to you if you know you want to sell the house eventually, perhaps a few years down the road. When you have a tenant taking care of it and paying you rent, you can take the time to make any upgrades or take care of maintenance items that might help you sell it for more money once that time comes.
Trying to decide to do with a parent’s house can be confusing and emotional. If you have any questions about the pros and cons of renting it out instead of selling it right away, please contact us at Portola Property Management, and we’d be more than happy to give you additional information.