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New Marriage, Two Sarasota Houses—Should You Keep One as a Rental?

Congratulations, Sarasota Newlyweds!

Happy times all around! The two of you are coming together to forge a future together as one. For older, more established singles, marriage may mean blending separate households and families. Inevitably in such circumstances, one question comes to the surface.

So, What Should You Do with the Extra House?

This is not a bad situation to find yourselves in, and the decision process is pretty straightforward. Ask yourselves:

  • Do we need the money now to pay off immediate debts and expenses?
  • If not, what would we do with the proceeds if we sold the property?

The first question is fundamental—if you need the money to pay off immediate debts and expenses, then the decision is made. Sell the property and use the proceeds to satisfy your financial obligations; there’s nothing else to think about.

The answer to the second question is a bit more nuanced. If you don’t need the funds immediately for any pressing issues, and you were to sell, what would you do with the funds? There are three primary paths for the money at this point:

  • Splurge on depreciating consumer goods having no real long-term value—boats, TV’s, lavish living, etc.
  • Speculate in the Wall Street casino by purchasing paper-assets like stocks, bonds, options, futures, etc.
  • Purchase cash-flowing assets that retain/increase in value and generate regular income—rental real estate.

Assuming you’re prudent and responsible people who are intent on building wealth and securing a comfortable retirement, we can rule out splurging 😉. As for speculating in the Wall Street casino vs. rental real estate ownership, your answer depends on your personality. Some people are gamblers, and others prefer secure and steady growth.

Rental Real Estate: A Secure Investment—and History Lesson

Let’s create contrast to illustrate a point: do you remember the company Enron? It was the high-flying, darling of Wall Street during the 1990s. The company’s stock kept going up, and up, and up—until it didn’t. It turns out that the entire company was basically a scam. Thousands of employees lost their jobs, and hundreds of millions of dollars in investor stock value evaporated virtually overnight. Tens of thousands of people who were millionaires on paper found themselves penniless and without a nest-egg when Enron folded. While an extreme example for sure, this is what can happen when investing in paper, vs. hard-assets like income-producing real estate: the value can go to absolute zero.

Contrast that with the real estate bust of the mid-2000s. When the housing bubble that was fueled mainly by fraudulent and imprudent lending practices burst housing prices nationally fell 60% or more! It’s estimated that 56% of home purchases during the period were made by people who wouldn’t have been able to qualify under standard lending requirements. It was devastating, and millions of property owners were forced into foreclosure and even bankruptcy as a result—but let’s take a closer look.

If you owned $300,000.00 in Enron stock when the company went bust, you would have a net worth (in stock) of $0.00—your money was gone forever. If you owned $300,000.00 worth of rental property when the housing bubble burst, you would still have a net value of $120,000.00—a terrible financial loss for sure, but not a total loss. The reason why so many people lost their savings during the real estate bust is not so much because of the decrease in housing values. It was because of the fact that they had $300,000, no-money-down loans outstanding on what had become $120,000.00 properties. Had they owned the properties free and clear (or with relatively small loan balances), they would have been fine. They would have retained $120,000.00 in value, and by today they would have fully recovered. The Enron stock owners still have nothing.

Also, even with the property value down to only $120,000, any renters would still be paying rent—the property would still be producing income! If you had to drop the rent a bit to keep it occupied, so what? The point is that you would not have gone bust and you would still be producing income. Rental property ownership is one of the safest and most secure investments that anyone can make, regardless of economic ups and downs. Imprudent financing decisions—not the purchase of real estate itself—is what can get real estate investors into trouble.

The Takeaway

If rental property ownership is one of the safest investments out there, and you already own a second property—and you don’t have an immediate need for the proceeds from a sale—why not keep your second property as a rental to take advantage of long-term appreciation and regular income? Oh, and did I mention the tax advantages? While beyond the scope of this article, know that there are many tax advantages to rental property ownership that enhance the return on your realty investments as compared to paper investment vehicles like stocks and bonds.

“But I Don’t Know Anything About Managing Rental Properties!”

The good news is that you don’t have to! An expert property management company can handle everything on your behalf: tenant screening, leasing, rent collection, maintenance, and tenant relations—all for a very reasonable monthly fee. With an expert property manager on your team, you can limit your involvement. All that’s left is to review provided monthly financial statements and check your bank account to make sure your direct deposits hit.


Newlyweds who are combining households may find themselves with a great opportunity to turn their “surplus” house—or condo unit—into a cash-flowing rental property. A professional property management company can handle all of the details of finding and screening tenants and managing the property and maintenance on a day-to-day basis. Before deciding to sell, newly married couples should seriously consider keeping their second Sarasota property as an income-producing rental.

About the Author

John Michailidis, JD, is the Broker/Managing-Member of Real Property Management of Sarasota & Manatee, a Sarasota, FL based residential property management company providing both Full-service and Lease-Only services to Sarasota, Bradenton, Venice, and North Port area landlords. If you own residential investment real estate anywhere in Manatee or Sarasota counties, do feel free to reach out to our team at 941-216-0005, or through our website.

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