Treasury Secretary Timothy Geithner gets new job title: landlord

Posted by Annalisa Burgos | June 3, 2009

Treasury Secretary Timothy Geithner’s job is to lead the United States out of the recession. Now he’s got another job — landlord.

Geithner assumed his new role the same way many homeowners in this market do: reluctantly.

The former head of the Federal Reserve Bank of New York listed his five-bedroom Tudor near Larchmont, a suburb north of New York City, for $1.635 million in February. The asking price was later dropped to $1.575 million, about 27K less than what he paid for it in 2004.

Unable to find a buyer, the Geithners opted to rent out the home for $7,500 a month and ride out the rough real estate market.

During a time when home prices are falling faster than a ton of bricks to the bottom of the Hudson, many sellers would rather rent out a home than lose hard-earned equity or do a short sale, where you sell the home for less than what you owe.

Being a landlord isn’t all that bad. Research the local laws and consult a local real estate attorney. If you move out of the city or don’t have the patience to find tenants and maintain the property, you can always hire a property manager.

The downside is that rent usually doesn’t cover all your costs as a homeowner, especially in high-priced markets like New York. Like other sellers put in this position, Geithner still has to cover part of the mortgage payments on $1.25 million in loans and $27,000 in annual property taxes. Ouch. Looks like the housing slump has really hit home for the nation’s top economic official.

SOURCE: Associated Press; Photo by Stephen Chernin

1 Comment »