Author Topic: Keep the current home and rent or sale it  (Read 685 times)

nj101

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Keep the current home and rent or sale it
« on: October 29, 2017, 08:07:42 PM »
Hi guys,

Looking forward to getting your opinions......

This is my situation:
   I bought the home for 300k and current market value is 370k.
   Based on current market value i have 200k equity on this home.
   I live next to big university and homes around here doesn't stay vacant at all and we rent it to Masters or PHD students.
   I can get 2400/month rent and I will be managing the property. (Will have 600 cashflow/month) (Never been landloard myself)
   We have 10% down for our next home and we will be able to get/save 10% in next 2 years and remove pmi.
 
In this situation, would you guys suggest to keep the home and rent it or just sale it?

Let me know if you need any further information.

Thank you,
-Raj

SeattleCPA

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Re: Keep the current home and rent or sale it
« Reply #1 on: October 30, 2017, 07:35:09 AM »
I would make sure you've thought about the Sec. 121 exclusion assuming you're a US taxpayer.

Sometimes that tax loophole (which says you can avoid income taxes on a gain of up to $250K if single and up to $500K if married from sale of a principal residence if you've lived in and owned a home for 2 of last 5 years) is too good to pass up.


tralfamadorian

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Re: Keep the current home and rent or sale it
« Reply #2 on: October 30, 2017, 08:45:39 AM »
We need to know what your PITIA is before we can help more with a rent vs. sell decision. 

Kroaler

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Re: Keep the current home and rent or sale it
« Reply #3 on: October 31, 2017, 07:59:57 AM »
We need to know what your PITIA is before we can help more with a rent vs. sell decision.


This.


But some VERY sloppy math puts your cash on cash return at 4.6% if you treat the 200k of equity like cash....   My knee jerk reaction is to sell. But Ive made real estate mistakes in my life so dont take my opinion too seriously......
« Last Edit: October 31, 2017, 08:01:53 AM by Kroaler »