Psypher_sl
shitlord
- 83
- 0
So a house I bought about 12 years ago new and lived in is currently a rental property. I lived in it for 2 out of the last 5 years, so if I sell it I won't have to pay capital gains. I'm trying to decide whether I should keep renting it or sell it while I can avoid the capital gains. I would have to sell it within the next 18 months.
Paid 192K of which I currently owe 150K. Current market value is about 260K based on recent sales. Rental income is $2K of which after paying the mortgage, insurance, taxes and HOA I'm left with about $150 which basically goes towards maintenance and repairs. The renters are basically paying down about 5K a year on the mortgage. If I sell it in the next 18 months, I'll clear at least 100K after paying the commission and part of the closing costs. Since I would have lived in it for 2 years our of the last 5 years, by IRS rules I would be exempt from capital gains.
If I sell now, I get 100K. Otherwise, I'll have to keep it rented for another 5 years just to recover the amount lost by capital gains so in reality, in order to make any more on it, I would have to keep it for like another 10 years. Keeping it that long, I'll just run into more losses in repairs as well as dealing with the roof, aging appliances, increased taxes, etc...
Also, some history regarding the decision to rent it out. The idea was to keep it as an investment property because it's a great property and a great location. It rents pretty fast, the last tenant took less than 2 weeks. Also, it's value got take back down to 190s, so it wasn't worth selling. It's recovered since then. The plan was to keep it rented until some time after the first kid graduated. So we'd be looking to keep it rented for another 10-12 years.
Now my thinking is, that keeping it rented for another 10-12 years might only net us another 15-20K if that. Also, selling it now would create a nice fund for future investments without having to touch any of existing funds.
So, what do you guys think? Sell or keep? any other factors to consider in deciding to sell or keep?
Paid 192K of which I currently owe 150K. Current market value is about 260K based on recent sales. Rental income is $2K of which after paying the mortgage, insurance, taxes and HOA I'm left with about $150 which basically goes towards maintenance and repairs. The renters are basically paying down about 5K a year on the mortgage. If I sell it in the next 18 months, I'll clear at least 100K after paying the commission and part of the closing costs. Since I would have lived in it for 2 years our of the last 5 years, by IRS rules I would be exempt from capital gains.
If I sell now, I get 100K. Otherwise, I'll have to keep it rented for another 5 years just to recover the amount lost by capital gains so in reality, in order to make any more on it, I would have to keep it for like another 10 years. Keeping it that long, I'll just run into more losses in repairs as well as dealing with the roof, aging appliances, increased taxes, etc...
Also, some history regarding the decision to rent it out. The idea was to keep it as an investment property because it's a great property and a great location. It rents pretty fast, the last tenant took less than 2 weeks. Also, it's value got take back down to 190s, so it wasn't worth selling. It's recovered since then. The plan was to keep it rented until some time after the first kid graduated. So we'd be looking to keep it rented for another 10-12 years.
Now my thinking is, that keeping it rented for another 10-12 years might only net us another 15-20K if that. Also, selling it now would create a nice fund for future investments without having to touch any of existing funds.
So, what do you guys think? Sell or keep? any other factors to consider in deciding to sell or keep?