Tuesday, July 24, 2012

Downsize, or Double-Down On Real Estate?

Priscilla and Patricia started both living and practicing together in Priscilla’s expanded home in October.  By spring of 2007, we knew we liked it, so Patricia and her husband wanted more than ever to sell their other properties. 

They still owned their house in Plainfield and a vacant ‘dream lot.’  The house had been listed since June without any serious offers made.  The vacant land market looked worse. 

We had to pare down expenses so Patricia’s family could contribute more to the expenses at the shared house/office, because owning all this real estate would not work long.

Downsizing by selling seemed best, but from necessity, we looked into becoming ‘accidental landlords’ by renting out Patricia’s previous house.  Checking out market rents showed we could probably more than cover the house’s mortgage, taxes and insurance.

But the risks and responsibilities of having rental property are not trivial, which Patricia knew well from personal experience.  Plus, we didn’t know how quickly the market would rebound so we could try to sell again. 

Downsizing was the long term solution to making the multigenerational living arrangement work, and rental was only short term with some risk.  We decided to drop our price and continue to try to sell (at least until next month). 

We hadn’t expected this problem.  After all, when we started planning, the real estate market was so hot that we couldn’t risk listing Patricia’s house too soon.  When the unexpected affects your family’s plans, call our office at (815) 436-1996 for an appointment to consider alternatives.  © 2012 Gruber Law Office, Ltd.


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