When Timothy Geithner moved to Washington earlier this year to become Treasury secretary, he put his home in Larchmont, New York on the market for $1.6 million. It didn’t sell, and Geithner, who was looking for a newhome in Washington while trying to resolve the worst economic crisis since the Great Depression, rented it out while he and his family lived in a home loaned to him by an old college buddy. It turns out that the Treasury secretary is not alone in becoming an involuntary landlord. Anecdotal evidence compiled by the Wall Street Journal indicates that many others have to rent out homes they can’t sell when they need to move somewhere else for career reasons. Hard data is not easy to come by but one telltale sign is how many people are converting homeowners insurance into landlord policies, with one insurer, Allstate, reporting a 27 percent increase in conversions in the first quarter. One couple cited by the Journal moved from Missouri to Virginia and put their home on the market at a price to recoup the $110,000 purchase price and the $30,000

spent on improvements. But after several months they got no bids and only seven lookers, so they too took in renters to help cover the costs. Real estate brokers have begun offering property management services to clients, though income from rent often falls short of what is owed on the mortgage, and then 3 to 12 percent of the rent is required for management fees. Experts caution about renting in the hopes that prices will come back to previous levels anytime soon, which they say is unlikely. Those with sufficient equity would do well to lower their sale price and take the hit, they say. Even those underwater on their mortgage may want to negotiate a short sale with the bank, which agrees to take a lower amount in repayment of the mortgage. The seller’s credit rating also takes a hit, but he or she is now free of the entanglements of renting from afar. Renter-occupied homes usually cost more in utilities and repairs than owner-occupied homes, and landlord policies sell at a premium to homeowner policies. Meanwhile, the owner still pays real estate taxes. With rental markets also depressed, it’s hard to get a monthly rent that comes anywhere near covering the cost of the mortgage and other expenses. There is the additional danger that if the rental period goes on too long, homeowners will lose out on the capital gains exclusion that requires owners to have lived in the house two of the last five years. Geithner finally bought a new home in Washington’s Maryland suburbs for $950,000 — he took a pay cut from his previous job as president of the New York Federal Reserve Bank. His Westchester home is still on the market.