Other VanOrden Posts

Monday, June 18, 2012

Secrets: While Leasing Your Home to Strangers

THE NEWS---We are in process of considering a lease of our Alaskan home for 3 years starting July 1st.  Who knows, maybe we will decide to move back someday.  If we can keep it leased for long enough, our oldest daughter and her husband want to buy it for their home once they retire from the Marines. 

Now here are some details that have come to light as we have pondered this decision.

1) If we live in the home for 2 years during the 5 year period prior to it selling then we will not have to pay capital gains tax.  Those two years don’t even have to be consecutive.  So if we sell it prior to June 30, 2015 we will satisfy the tax man without giving him more of our money.

2) Finding a good family to lease the home wasn’t terribly difficult once we made it known we were thinking about doing so. Word of mouth brought us three potential renters. 

3) With the help of a good friend I found the lease agreement online which spelled out all the necessary details to protect our investment. 

4) If word of mouth advertizing doesn’t work,  a good online system to seek applications is through the military housing website: http://www.ahrn.com/index.php

5) You can list your home and all the parameters you wish to set for renters, such as, no pets, non-smokers, etc. 

6) Try to meet the potential renters in person and let them see the home before deciding if they want to lease it.  This really helped us make up our minds to go ahead and do the lease to a young military family.  He is a dentist and she is a gem.  They have two young children.   

7) You should check with a tax accountant to figure out if rental income will affect your tax liability. Ask about the potential for depreciating your home while it is a rental unit.      

Large family homes are hard to find for rent in the Anchorage area right now as of June 2012.  They are renting for approximately $1.00 per square foot.  Do the math to make sure you have sufficient rental income to cover all expenses; mortgage payment, taxes, and repairs.  Utilities can and I think should be the responsibility of the renter.

Check back in a few years and I will be able to tell you if we found being a landlord a good experience or if it just brought us too many headaches. But for now, we still have a foot in the door in our beloved Alaska.