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The market is not looking good for me to sell my house, much less break even on it. I can easily get my mortgage out of the house by renting, but I'm not sure how much to mark it up by in order to be safe. What kind of process is involved with renting a house and is it really better to do that vs. selling with a loss?

While there are definitely tax issues which contribute to your decision, to me this is more a financial and lifestyle question than a tax question. You can read about the tax aspects in IRS Publication 527. I'll offer some observations from my similar experience.

You need to decide if you want to be a landlord. For those of us who desire hassle-free living, there are a lot of drawbacks to being a landlord. You can pay someone to manage the property for you, but that reduces your income from the property. If you want to manage the property yourself, I've seen a lot of good advice over the years from Robert Bruss. (If your paper doesn't carry his column, do a google search and you can find him online.)

As for the financial side, you need to decide whether you can realistically expect the market to improve so you can sell the property. Remember that it can go down further instead of going up. Finally, don't worry about how much rent to charge. The market will decide that, just like it's deciding the sales value of your home.

Phil Marti
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