What to do With Unoccupied Property
Get information to help you manage vacant property
You may end up with an unoccupied property if your home does not sell and you need to relocate, or you inherited a property and don't know what to do with it. There are several expenses that go along with maintaining a vacant house, including property taxes and insurance, which can go up if the property remains vacant for an extended period of time. You may also need to check local regulations regarding unoccupied properties. However, there are at least two possible options for managing your vacant property: renting out your house for extra income or donating it to charity for a tax break.
Turning your unoccupied property into a rental
If the housing market is stalled, it can be tough to sell your home. However, a decline in the housing market may mean an increase in the demand for home rentals. Newlyweds, young professionals and even families that need to relocate quickly may consider renting a home rather than an apartment. So, even if you can't seem to sell it, you may be able to fix up your vacant house and rent it out. Just remember that being a landlord has its share of responsibilities, which may include:
- Performing routine maintenance (or hiring someone who can)
- Finding quality tenants or hiring a real estate agent to do so
- Following fair housing laws and regulations.
- Covering the cost of some utilities
Renting out your house or vacant property may also have several advantages, including the ability to deduct repair costs, advertising costs, real estate fees and other related expenses from your taxes. Plus, the income you obtain from renting your vacant house can be used to cover taxes, insurance and any outstanding mortgage payments.
Consider donating unoccupied property to charity
In the event the vacant property goes unsold for a significant period of time and you cannot find a renter, you may explore donating it to a charity or a governmental unit specially equipped to handle such donations. Even if the structure itself is not valuable, the land beneath it might be. However, since you cannot donate something you don't own, you can't donate your home if it has an outstanding mortgage.
Below are several organizations that specialize in home donations. If you decide to donate your vacant house, consult the IRS website or speak with your tax advisor for detailed information about any tax deductions you could receive for donating property.
- Land banks: To fight urban blight, many regions have established land banks to hold, manage and eventually re-develop land that has been donated or has gone through a tax-foreclosure process.
- City programs and local non-profits: Many major cities have their own programs to help rehabilitate vacant houses for re-sale or to convert properties into community gardens and other uses.
- Habitat for Humanity: One of the leading charities in the nation, Habitat builds new homes and restores older homes for families who are unable to afford a house on their own. The group would most likely welcome the donation of a vacant house.
Citizens Bank can help you manage the mortgage on your vacant property
Whether you're looking for ways to pay off your mortgage or want to apply for a mortgage to finance your new home, Citizens Bank can help. Obtaining a mortgage on a vacant property may have time constraints and maximum financing limits you have to work within. To learn more about Citizens Bank's mortgage rates and options or start the application process now, speak to a home loan advisor at 1-888-514-2300.