The Money Mustache Community
Learning, Sharing, and Teaching => Real Estate and Landlording => Topic started by: 4tify on October 25, 2016, 06:21:56 PM
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Hi all
I am selling a home that my mom lived in for almost 4 years. It was my first & only investment property, and while it was helpful for her it was a real test of patience for me and frankly not a good investment at all since I covered all the maintenance, water, repairs, and part of the rent for her. I think the main issue was that my tenant was my own mother, which also came with lots of baggage. Keeping the place as a rental won't do any good since it won't cash flow & fails all the normal rules of thumb (1%/50%).
However now that I've decided to sell, I will incur capital gains since the property has appreciated. My approximate gain after selling costs etc is 65k, so about 13k in taxes.
My struggle now is whether to roll that into a 1031 exchange and purchase another property or two elsewhere and in a better cash flowing area. Emotionally I found being a landlord very frustrating, but again that situation had baggage. If I do buy another rental, I'll definitely put it under management this time since it will likely be out of state in order to make it worthwhile.
So my question is for those of you who have rentals under management: just how much work/frustration is it? And given my financials, is it better to just take the tax hit & run or try again? If I don't re-invest in real estate I'll put the proceeds into the market, but that's where I already have all the rest of my money. I had initially thought the rental would be a good diversifier. But again, I feel a little burned by the whole thing. Just trying to sort out whether it's worth another go...
Thank you for your experiences & thoughts on the matter!
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Having it managed doesn't, or didn't in my case, take away the "urgh" factor of getting an email saying "you need to ok fixing this", or "the tenants have done y".
I'm selling my two rentals now. I'll probably just put the money in ETFs - sure, they go down, but if you're diversified it's kind've "oh well". They won't actually cost you money out of your own pocket.
In fact I'm strongly in favour of selling the house I live in next year, too. Let someone else deal with all the hassle. We'll see. Depends how next year goes (wife on mat leave for much/most/all of it may delay us by a year).
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Interesting. Did you manage to have a positive cash flow at all?