Please help me decide whether to sell or not to sell my condo. I didn't sell it when I bought my new oversized mansion in a HCOL area, because the market had tanked so much and I was sure it would come back up shortly. It did, but I had a tenant in there that seemed to be great and even though I was losing money every month, I didn't want to disrupt his life (see how bad I am at this?) and now it's down again.
Here are the facts:
Condo location: Reston Town Center, Virginia
Purchase price: $354K in 2005
Current estimated value: $270K-$295K (depends on how much reno I do before listing it)
Ownership cost: PITI $1742/month + HOA $361/month = $2,103/month
Rental price (if I rent it again): $1650-$1700/month
Monthly Cash Flow: -$451/month!!
Other factors: Reston Town Center is on the Silver Line, which was expected to be completed by 2016. Now we're hoping for sometime in 2020. This is not guaranteed.
If I sell now, I am locking in my loss of at least $95K (including real estate fees) and a further loss of over $20K (from past monthly cash flow negatives) and maybe $17K in maintenance fees. Total expected loss by selling NOW: $132K
If I hold on for two more years and keep it rented for those two years, I'll add at least another $13K in losses, but I cannot imagine that the sales price could decrease any more than it already has. And I'm hoping with the metro + Amazon effect, that housing prices might increase a lot. At this point, I'm just hoping to break even!
Affordability: I could afford to pay off the mortgage today if I wanted (but I wouldn't).
Further info from accountant:
At the end of 2018 you have accumulated 84k in depreciation, that takes your cost down to 276k, so if you sold it now for 295k you would have a gain. Because we have to recapture the depreciation that would all be taxed at 25% for Fed. Each year your depreciation is 12,446, which lowers your cost basis.
Now at the same time you have accumulated 72k of passive loss carryovers. This will net against your gain and would exceed it, so in the example above, you wouldn’t pay any tax on the gain, you would actually have a 50k loss that would go against your ordinary income which in your case is worth $17,500 in real cash (from tax return).
I am leaning heavily in one direction and I don't know why. I don't think that what I WANT to do is the best decision financially and I can't figure out why I'm dragging my heels on making a decision. Now I'm just losing more money because it's not listed on either the sales database or the rental database.
Please, knock some sense into me and give me advice that I will listen to!!
