With the market this way, I know we cannot be the only ones dealing with this this year. Looking for wisdom from those who have "been there done that".

We all know the current market disaster. We had our home listed for a year, no sale. We have decided we will rent it out to ride out the market and maybe sell in a few years. Due to the current renatl market we will wind up renting at a loss. We figure a "bird in the house" is worth more than a vacant home on the market for who knows how long. We made the choice to buy being active duty and we will make the choice to rent at a loss if that is what it takes to get by.

So.........Is anyone else facing this? Done this? and What have been people's experience with renting at a loss come tax time.

I'm renting about even right now. I suggest getting an accountant. Rentals allow for different deductions but from what I've experienced on my rental, your loss will be tax deductible. My first year total was slight loss due to the eviciton of my tenants and it was deducted.

Good advice above...seek the assistance of a tax specialist or accountant. While you may be "losing" money on paper, there are plenty of write-offs that offset the negative income each month.

My personal story is that I rented out my condo in Alameda for a monthly cash loss of about $100 a month. (Another way to look at it was that for only $100 a month, I was buying a condo in the Bay Area.) At tax time, I crunched the numbers, added up the interest, HOA dues, property manager's fee, and depreciation. It all worked out where I was getting about $150 a month in tax breaks. In addition, at the end of the rental perod, I walked away with about $130K in additional equity.

So while I was "losing" $100 a month, the condo was appreciating about $1,000 a month. Renting my condo out was one of the smartest financial decisions I made.

And if you're not going to be within a decent driving distance, GET A PROPERTY MANAGER! Its made my experience as a landlord almost stress free. I couldn't have imagined going through an eviction without one.

Whether or not you should keep your house and rent it out after PCS depends partly on what you are going to do at your new duty station. Id sugest that you keep your options open as long as possible.

If youve already decided to keep your house and rent it, make sure you can get/want either govt quarters or a rental at your new duty station. I had one PCS where there was only 1 suitable rental house availabe. Also the suggestion of using a property manager is a good one especially if your not renting to another service member. If your using a property manager get one at the beginning of the process. Their fee for finding you a suitable renter weeds out losers and save you a lot of time.

Id also connsider whether i expected/desired to receive orders back to an area at some point in the future. If i did and liked the house im in, id be more willing to keep the house even if it is a loss generating venture while im at the new duty station.

Finally, even though you will lose money on the sale of your current house, you must recognize that the area you are moving to is also most likely price depressed. If you find a great house at your new duty station with an affordable price it might be the time to go ahead and take your loss on your current house and not have the headaches of owning rental property. During this analysis be sure and see how the new legislation of selling a house under orders at a loss benefits you. Good luck on this difficult decision.

Thanks for all of the valuable input on this from people who have done it!

We have decided on a dual listing to keep our options open; For rent/sale whichever comes first. Maybe this time we will get lucky on a sale who knows.

We have decided to use a property manager from the get go. Has anyone had positive/negative experiences buying a home warranty for there rental?

Oh yes and we will be getting a qualified CPA this time, no more self prepared taxes at this point!

I have used 2-10 as my home warranty company.
"http://www.2-10.com"