What to do when a property can't sell or rent? Stuck forever?

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What to do when a property can't sell or rent? Stuck forever?

Sam P.
CAROL STREAM, IL · Member since 2017 · 5 posts · 0 votes

I have a crazy question that I wasn't able to find an answer for. What are the options if you have a rental property that is paid in full, but no longer cash flows and no one wants to buy it. For example, lets say you purchased a property in a rural area and the only job provider left the town. You no longer can get tenants nor would anyone want to buy from you. However, you no longer want to own the property, incur property taxes, maintain utilities, etc... What do you do?

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Matt K.
Walnut Creek, CA · Member since 2015 · 3k+ posts · 2k+ votes
8y

donate it

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  • Matt K.
    Walnut Creek, CA · Member since 2015 · 3k+ posts · 2k+ votes
    8y

    donate it

    2Reply
  • Adam M.
    Rental Property Investor · Fort Collins, CO · Member since 2008 · 168 posts · 105 votes
    8y

    @Sam P. Why did you buy in the first place? Sounds like you're about ready to pay some stupid tax...

    0Reply
  • Sam P.
    OP
    CAROL STREAM, IL · Member since 2017 · 5 posts · 0 votes
    8y

    I was thinking worst case scenario.  If something really goes horribly wrong, is it possible to just walk out and your other assets are protected or are you stuck paying taxes (and fines) for the rest of your life.

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  • Chris Masons
    Investor · Union, NJ · Member since 2011 · 838 posts · 295 votes
    8y

    Sell for undervalue. Every property has a valuation, trust me if you reduce the price low enough someone will buy it unless there is something fundamentally wrong with it in which case you donate it

    You mentioned that it doesn't cash flow even though it's paid off???

    thx,

    Chris

    0Reply
  • Shawn Clark
    Investor · Middle River, MD · Member since 2017 · 191 posts · 127 votes
    8y
    Sell it cheap. Donate it. Or let it go in tax sale. I don’t know how letting it go would affect your credit rating. Interesting question.
    1Reply
  • JD MartinBusiness Member
    Moderator
    Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
    8y
    Originally posted by @Sam P.:

    I was thinking worst case scenario.  If something really goes horribly wrong, is it possible to just walk out and your other assets are protected or are you stuck paying taxes (and fines) for the rest of your life.

     You can always donate it. We have had people donate property that they couldn't sell to our utility company. They get a fair market value tax deduction and rid themselves of something that has no value to them any more. 

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  • Michael Jones
    Investor · Louisville, KY · Member since 2017 · 199 posts · 253 votes
    8y

    Auction!!!

    0Reply
  • Sam P.
    OP
    CAROL STREAM, IL · Member since 2017 · 5 posts · 0 votes
    8y

    Sounds like if you really want to get rid of it, someone is willing to take it.  Would this apply even to barren land out in the boonies?

    0Reply
  • Jack Bobeck
    Rental Property Investor · Jacksonville, FL · Member since 2008 · 784 posts · 528 votes
    8y

    No chance for a HUD rental? Did the whole town die?

    0Reply
  • Sam P.
    OP
    CAROL STREAM, IL · Member since 2017 · 5 posts · 0 votes
    8y

    This is just speculation questioning.  If I were to invest out in the boonies and if something ever happened to the market (such as the only job source leaving town) or the some sort of catastrophic damage that happened to the house that the insurance didn't cover and basically render the land to the point that no one wants it, what would be the exit options.

    0Reply
  • Brandon Ingegneri
    Rental Property Investor · Providence, RI · Member since 2015 · 1k+ posts · 594 votes
    8y
    Light a match. J/K. I would try your approach. There needs to be a different angle that has not been explored in both the selling and renting fields. Between both avenues, there has to be something that can be changed up in your process to deal with it one way or the other.
    1Reply
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