If you've sold your rentals - Relief? or regret?

[Pookie]

I am still thinking about getting out of the rental business but can't seem to make a decision. I am recently divorced and taking on the headaches alone is a bit overwhelming. It's hard to find good help these days and I'm not getting any younger.

I hired a PM but like you have all said, they need to be managed. Their contractors are over booked, too. I would love to move overseas but am somewhat fearful of leaving a PM in charge, especially from what I have experienced so far. I plan to meet with them to see if we can make things better.

In the meantime, I am thinking about selling them all. THEN, I look at the income and think, nah, keep them a bit longer. Then I have a big repair and I think I can't do this anymore.

If I sold them, I would invest them in index funds, like everything else. I have thought about REIT's but haven't looked into them.

My question is - if you have gotten out of the rental business and sold everything, do you have regrets? Or are you dancing in the streets with relief? And any advice if you sold.
Thx!

[Omy]

Just sold our first rental. Dancing in the streets.

We had lovely long term tenants, but our stomachs would always drop when we saw their names on the caller id.

It's as if a huge weight (that we didn't even realize was there) has lifted.

[oldladystache]

relief. absolutely.

[clarkfan1979]

I am still thinking about getting out of the rental business but can't seem to make a decision. I am recently divorced and taking on the headaches alone is a bit overwhelming. It's hard to find good help these days and I'm not getting any younger.

I hired a PM but like you have all said, they need to be managed. Their contractors are over booked, too. I would love to move overseas but am somewhat fearful of leaving a PM in charge, especially from what I have experienced so far. I plan to meet with them to see if we can make things better.

In the meantime, I am thinking about selling them all. THEN, I look at the income and think, nah, keep them a bit longer. Then I have a big repair and I think I can't do this anymore.

If I sold them, I would invest them in index funds, like everything else. I have thought about REIT's but haven't looked into them.

My question is - if you have gotten out of the rental business and sold everything, do you have regrets? Or are you dancing in the streets with relief? And any advice if you sold.
Thx!

I think the correct answer is knowing your FI number and what is "enough," which is a different number for everyone. If you can sell your rentals and buy index funds and the passive income is "enough" your life will be more simple with less headaches. If you sell your rentals before you have, "enough", being short on money is also a headache that needs to be managed.

I bought my rentals in 2007, 2012, & 2018 and my primary in 2019. I have not hit my FI number, so I'm still holding onto rentals for higher returns with some work and headaches attached to it. Once I hit my number, I could see myself selling the rentals and buying stock for a more simple life, but not higher returns. 

[Pookie]

Just sold our first rental. Dancing in the streets.

We had lovely long term tenants, but our stomachs would always drop when we saw their names on the caller id.

It's as if a huge weight (that we didn't even realize was there) has lifted.

OMY - I read all about your dilemma while searching for answers before posting. My rentals aren't in the price range as yours but I will still get hit with the ACA and taxes, unfortunately. I've debated on getting insured with the religion based health care "providers" to try and save (possibly $10-$14k) but worry about accidents/care, etc.

I just need to take the leap and know that I will sleep better not constantly worrying about repairs, etc. It really does keep me up at night! And I'll be dancing along with you!

Thank you for your input.

[Pookie]

relief. absolutely.

Haven't heard any regrets yet!! :)

I think the correct answer is knowing your FI number and what is "enough," which is a different number for everyone. If you can sell your rentals and buy index funds and the passive income is "enough" your life will be more simple with less headaches. If you sell your rentals before you have, "enough", being short on money is also a headache that needs to be managed.

I bought my rentals in 2007, 2012, & 2018 and my primary in 2019. I have not hit my FI number, so I'm still holding onto rentals for higher returns with some work and headaches attached to it. Once I hit my number, I could see myself selling the rentals and buying stock for a more simple life, but not higher returns. 

clarkfan1979 - I always like reading your well thought out and wise posts. TY.
Great advice as always. I am trying to figure out now what my number is. Having the security of the rental checks has given me more freedom and I have some fear without them. I guess, too, that there are always some kind of trade off.
My goal this weekend is to figure out which ones to sell first and get with my accountant about taxes, depreciation. I won't sell them all at once, I think.

It's kind of like the OMY syndrome in a different way. Yes, I am worried about counting on index funds only, even with cash emergency funds. It took a leap to leave a regular job and depend only on rentals. It will take a leap of faith to sell the rentals and depend on the stk market.

Thank you again for your thoughtful input.

[Omy]

Rentals were definitely the "crutch" that helped me ease into retirement. Knowing that our rental income would cover our basic expenses made it relatively easy to finally turn off the firehose of cash from our jobs.

However, being a landlord is a JOB. It's mostly passive and part time, but when we had a vacancy or a difficult tenant or a major issue it occupied my brain full time. And we should be able to get similar returns by putting our proceeds in relatively safe investments.

I do not recommend going on the cheap for health insurance. You MIGHT save yourself $10k, but you could cost yourself hundreds of thousands with a bad diagnosis or accident. We are just considering the higher premiums part of the cost of selling.

[GilesMM]

Bittersweet when we sold our second home.  It was a great rental for a decade but the real estate market went berserk and it was worth way more to someone else than to us.  It is still a rental, unchanged, and we can stay when we visit, but we don't as we don't want to see it - too sad!

[sonofsven]

I personally have regret because my duplex was making money when it was sold years ago, and it would be making even more now. I worked on it for years and it was set for the long term as my early retirement income stream.
However, it was sold as part of a divorce settlement and I'm very glad to be divorced!
I have a good friend who has been selling her rentals and she is very happy. She's "investing" the money into local farmland to feed her passion for raising cows and other agricultural pursuits.

[waltworks]

I sold all our rentals quite a while ago (like, 4 years or so). At the time house prices seemed divorced from rents and the places had all appreciated a ton (the properties were purchased in the 2009-2012 timeframe when things were super cheap).

When Covid started I was pretty psyched to have gotten them off my chest, figured there would be a housing crash...

Obviously I was wrong! In hindsight I should have kept them all, c'est la vie.

-W

[clifp]

clarkfan1979 - I always like reading your well thought out and wise posts. TY.
Great advice as always. I am trying to figure out now what my number is. Having the security of the rental checks has given me more freedom and I have some fear without them. I guess, too, that there are always some kind of trade off.
My goal this weekend is to figure out which ones to sell first and get with my accountant about taxes, depreciation. I won't sell them all at once, I think.

It's kind of like the OMY syndrome in a different way. Yes, I am worried about counting on index funds only, even with cash emergency funds. It took a leap to leave a regular job and depend only on rentals. It will take a leap of faith to sell the rentals and depend on the stk market.

Thank you again for your thoughtful input.

I certainly wouldn't rush into it. The one advantage of having out-of-town rentals, is I'm never tempted to get on a plane and second-guess the PM or the contractor.  So the hassle factor has never been a big deal for me.  I do lose 8-10% of my top-line revenue paying the property manager.

I sleep much better at night knowing I'm much more diversified than just owning stocks.  (Bonds and cash haven't been worth owning for a decade, although that is changing)  My portfolio was only down 6% in 2022 since stocks are only 35% of my net worth. (35% is still much higher than Yale's endowment)   However, my cash flow increased, since I still raised rents.

Rents, like stocks dividends are sticky.  they go up slower than prices, and they will go down slower also. Rents look like they may decrease a few percent this year.  I'm certainly not cutting my rents next year, because it is very unlikely a tenant is going to look for a new place if I just keep rents the same.  I suspect that rents on residential properties have a near-zero correlation with stock prices.

Now, that I've accumulated enough to enjoy a Fat RE, my concern is dealing with black swans. Pretty much every decade of my life there have been events, that had a major impact on the economy that almost no one predicted. The oil shock in the early seventies, double-digit inflation in the late 70s early 80s, and the tech boom of the 90s,.  The dot com crash, followed by 9/11, the housing crash, in 2007-9, and of course Covid.  So far none of these events caused more than a few years of dip in the stock market.  Will that always be the case? I have my doubts. 
A shooting war or even a full-scale trade war with China would absolutely kill Apple, and severely hurt many other companies  What about Schwab/Vanguard being run by the crooks, like Enron, Madoff, or FTX and stealing their customer's money?  I've learned something about encryption lately, that makes me concerned that hackers, especially state-sponsored ones, could erase any record that I or anyone else owns financial assets.  Schwab tells me I have 2,068 shares of VTI in IRA account, is there a paper record of this somewhere? how often is it updated?  In contrast, there is a physical record showing that own properties in Vegas, and the Kansas City area, and the paper is what counts not the electronic record. 

I have no plans to sell my rentals, I'll let my executors deal with it.

[PMJL34]

Well said Clark! I also plan to sell as soon as I have "enough" (but I'm not there yet).

I do think I'll have a very difficult time actually pulling the trigger/selling. I also worry about ACA and other financial repercussions from selling, but will cross that bridge when I get there.

Another major reason for me to sell is because my rentals are within blocks of each other and it's just too much concentrated risk for me. Best of luck OP!

[clarkfan1979]

relief. absolutely.

Haven't heard any regrets yet!! :)

I think the correct answer is knowing your FI number and what is "enough," which is a different number for everyone. If you can sell your rentals and buy index funds and the passive income is "enough" your life will be more simple with less headaches. If you sell your rentals before you have, "enough", being short on money is also a headache that needs to be managed.

I bought my rentals in 2007, 2012, & 2018 and my primary in 2019. I have not hit my FI number, so I'm still holding onto rentals for higher returns with some work and headaches attached to it. Once I hit my number, I could see myself selling the rentals and buying stock for a more simple life, but not higher returns. 

clarkfan1979 - I always like reading your well thought out and wise posts. TY.
Great advice as always. I am trying to figure out now what my number is. Having the security of the rental checks has given me more freedom and I have some fear without them. I guess, too, that there are always some kind of trade off.
My goal this weekend is to figure out which ones to sell first and get with my accountant about taxes, depreciation. I won't sell them all at once, I think.

It's kind of like the OMY syndrome in a different way. Yes, I am worried about counting on index funds only, even with cash emergency funds. It took a leap to leave a regular job and depend only on rentals. It will take a leap of faith to sell the rentals and depend on the stk market.

Thank you again for your thoughtful input.

Thank you for the kind words. I'm also here for the quality comments from others. I've learned valuable information from others and try to provide value when I can. I think it's a great community. I like your analogy of hanging onto rentals too long as another version of OMY syndrome. 

@waltworks claims that he should have kept his rentals. In an effort to keep up with the status quo, I am going to disagree :) His posts over the years have suggested that he is happy and has enough. As a result, it was the right call to sell when he did because it fit within his own personal goals. By selling his rentals, he was able to buy some of his time back, which is more important than money and the foundation of this website and forum.

[Jon Bon]

I still have mine.

They are totally a passive investment. Until they are not......

Most of the time they look after themselves but I do have 2 weeks a year that is "turnover season" I work pretty hard on them during that time.

The appreciation over the past 5 years has been nice, but you cant eat appreciation, and when you can, you pay a massive amount of tax on it. If I could sell them tax free? I think I might sell half, and keep the half that is in better shape and easier to rent. Its too good of money to sell. I am pretty sure my rentals alone would give me a decent retirement. I think there is something to be said about those of us that choose this with our eyes open versus folks that ended up being accidental landlords because they could not really sell their primary residence.

My metaphor would be something like: Some people choose to not own a home, or end up paying a lawn guy, house cleaner, handyman, and car mechanic etc etc. Nothing wrong with those life choices but they are a trade off.

So I am fine taking care of my own house even though it can be a pain in the ass. Same with rentals. Some people just can't deal with the upkeep. It's not for them, and that is ok.

[PMJL34]

Well said Jon Bon! I agree with everything you said.

I personally "enjoy" real estate/house related stuff that many others would not. Well, at least for now at this stage of my life. And yes, the money is great.

However, if I could sell tax free, I'd most likely sell everything :)

EDIT: I'd sell because one thing I haven't figured out is how to travel for extended periods of time (one month+) and keep the rentals running as smoothly as I would like. For example, I still have older tenants who pay cash or section 8 annual inspections that need little things here and there. As a DIY everything, I guess I need to find a helper eventually.

[Pookie]

I certainly wouldn't rush into it. The one advantage of having out-of-town rentals, is I'm never tempted to get on a plane and second-guess the PM or the contractor.  So the hassle factor has never been a big deal for me.  I do lose 8-10% of my top-line revenue paying the property manager.

I sleep much better at night knowing I'm much more diversified than just owning stocks.  (Bonds and cash haven't been worth owning for a decade, although that is changing)  My portfolio was only down 6% in 2022 since stocks are only 35% of my net worth. (35% is still much higher than Yale's endowment)   However, my cash flow increased, since I still raised rents.

Rents, like stocks dividends are sticky.  they go up slower than prices, and they will go down slower also. Rents look like they may decrease a few percent this year.  I'm certainly not cutting my rents next year, because it is very unlikely a tenant is going to look for a new place if I just keep rents the same.  I suspect that rents on residential properties have a near-zero correlation with stock prices.

Now, that I've accumulated enough to enjoy a Fat RE, my concern is dealing with black swans. Pretty much every decade of my life there have been events, that had a major impact on the economy that almost no one predicted. The oil shock in the early seventies, double-digit inflation in the late 70s early 80s, and the tech boom of the 90s,.  The dot com crash, followed by 9/11, the housing crash, in 2007-9, and of course Covid.  So far none of these events caused more than a few years of dip in the stock market.  Will that always be the case? I have my doubts. 
A shooting war or even a full-scale trade war with China would absolutely kill Apple, and severely hurt many other companies  What about Schwab/Vanguard being run by the crooks, like Enron, Madoff, or FTX and stealing their customer's money?  I've learned something about encryption lately, that makes me concerned that hackers, especially state-sponsored ones, could erase any record that I or anyone else owns financial assets.  Schwab tells me I have 2,068 shares of VTI in IRA account, is there a paper record of this somewhere? how often is it updated?  In contrast, there is a physical record showing that own properties in Vegas, and the Kansas City area, and the paper is what counts not the electronic record. 

I have no plans to sell my rentals, I'll let my executors deal with it.
[/quote]

ClifP - I met with a realtor and will look into what the costs will be with ACA and capital gains. Your input gave me pause which is what I need. I think taking this on my own has just been scary.

I also need a cash cushion that I don't have. I'll look into selling some land that I haven't done anything with (except pay taxes!). Again, I'll take a hit but the cash will give me a peace of mind.

Diversity is good, too. And being able to increase rents. What's not to love? :)

And maybe I need to give the PM the power to make the right decisions like you have because you live in another town. That one is hard - to let them take total control but what I am paying them for anyway. Thank you for your input!

[ca-rn]

Well said Jon Bon! I agree with everything you said.

I personally "enjoy" real estate/house related stuff that many others would not. Well, at least for now at this stage of my life. And yes, the money is great.

However, if I could sell tax free, I'd most likely sell everything :)

EDIT: I'd sell because one thing I haven't figured out is how to travel for extended periods of time (one month+) and keep the rentals running as smoothly as I would like. For example, I still have older tenants who pay cash or section 8 annual inspections that need little things here and there. As a DIY everything, I guess I need to find a helper eventually.

Totally agree!
I sold one rental property, no 1031 exchange- had to pay alot of taxes/depreciation recapture but its a RELIEF to have one less property to manage.

I have a multi-unit (occupy one unit) that is almost paid off.  It has helped me to attain FI by keeping housing cost low in a HCOL city BUT if I could sell tax free too- I'd most likely sell and move out of state/country too!

And totally agree about the added extra layer of complexity/stress involved if you want to travel for extended periods.  Its my dream to slow travel around the world but ain't gonna happen if I also need to be the landlord/leasing agent/handyperson etc....

[Dee_the_third]

Relief, but only because it’s an old house and I know there are some big ticket items that are due any day. Some sucker bought it and waived all contingencies, and I turned a tidy profit 🙈

I’m being slightly facetious, it’s a good money maker. But we’re moving and I can’t be there to watch. I especially don’t trust the contractors. It’s so hard to find a good one that shows up on time and completes the FULL scope on schedule in my town. Every time there’s clean up items that I just don’t trust someone else to notice.

I’m holding on to the newer buildings with stable tenants in a good neighborhood. Less to go wrong in those.

[Jon Bon]

All my rentals are on the same schedule. Yes that means technically ALL of them could turn over in the same 2 week period. And if your wondering yes its a shit ton of work.

Well I just got through it, and am done for another year. But at times I for sure was ready to be done with the whole mess and sell them all!

It's honestly not that bad now that I have done it a few times, but you need to be willing to set everything aside, and work 10 hours away for 6-7 days in a row. Having a relationship with a bunch of local handymen and fixers goes a long way! I guess I'd rather know I have 7 days of work at the end of July every year, then to spread that unevenly over the year. This yeah I had a bunch of dude-bros that did not once clean their house in 2 years, nor did they take care of their animals. So there was lot of work to do. Luckily my other units were prefectly fine so I paid the cleaner for them and called it a day.

So now in theory the rest of the year is smaller 1 hour jobs with calls to professionals to patch a roof or replace an A/C mixed in.

Sure I will feel tons of relief when I sell, because they ARE work, but they also are worth the headache for the payday (for now at least!)

[eddy20]

I have sold 6 of my last homes/apartment buildings and regret every sale! I could have/should have kept all 6 properties as all are up in value from where I sold by million's of dollars. Sure it would have been a struggle, but we could have done it with some tricky financing. We still have 7 properties; but I look back and and if I would have held on and went with the ups and downs of the market my net worth would probably be 2x what it is today along with my monthly cash flow. As of now holding on. Just my .02.

[firemane]

clarkfan1979 - I always like reading your well thought out and wise posts. TY.
Great advice as always. I am trying to figure out now what my number is. Having the security of the rental checks has given me more freedom and I have some fear without them. I guess, too, that there are always some kind of trade off.
My goal this weekend is to figure out which ones to sell first and get with my accountant about taxes, depreciation. I won't sell them all at once, I think.

It's kind of like the OMY syndrome in a different way. Yes, I am worried about counting on index funds only, even with cash emergency funds. It took a leap to leave a regular job and depend only on rentals. It will take a leap of faith to sell the rentals and depend on the stk market.

Thank you again for your thoughtful input.

I certainly wouldn't rush into it. The one advantage of having out-of-town rentals, is I'm never tempted to get on a plane and second-guess the PM or the contractor.  So the hassle factor has never been a big deal for me.  I do lose 8-10% of my top-line revenue paying the property manager.

I sleep much better at night knowing I'm much more diversified than just owning stocks.  (Bonds and cash haven't been worth owning for a decade, although that is changing)  My portfolio was only down 6% in 2022 since stocks are only 35% of my net worth. (35% is still much higher than Yale's endowment)   However, my cash flow increased, since I still raised rents.

Rents, like stocks dividends are sticky.  they go up slower than prices, and they will go down slower also. Rents look like they may decrease a few percent this year.  I'm certainly not cutting my rents next year, because it is very unlikely a tenant is going to look for a new place if I just keep rents the same.  I suspect that rents on residential properties have a near-zero correlation with stock prices.

Now, that I've accumulated enough to enjoy a Fat RE, my concern is dealing with black swans. Pretty much every decade of my life there have been events, that had a major impact on the economy that almost no one predicted. The oil shock in the early seventies, double-digit inflation in the late 70s early 80s, and the tech boom of the 90s,.  The dot com crash, followed by 9/11, the housing crash, in 2007-9, and of course Covid.  So far none of these events caused more than a few years of dip in the stock market.  Will that always be the case? I have my doubts. 
A shooting war or even a full-scale trade war with China would absolutely kill Apple, and severely hurt many other companies  What about Schwab/Vanguard being run by the crooks, like Enron, Madoff, or FTX and stealing their customer's money?  I've learned something about encryption lately, that makes me concerned that hackers, especially state-sponsored ones, could erase any record that I or anyone else owns financial assets.  Schwab tells me I have 2,068 shares of VTI in IRA account, is there a paper record of this somewhere? how often is it updated?  In contrast, there is a physical record showing that own properties in Vegas, and the Kansas City area, and the paper is what counts not the electronic record. 

I have no plans to sell my rentals, I'll let my executors deal with it.

The concern about hackers is really the only thing that makes mw worry about NOT owning any rentals.

It is not so much about encryption, as much as the way the cybersecurity business goes, particularly more on the human side. Nonstop vulnerabilities due to companies focusing on shilling new features. Older generations in companies usually in senior level roles fighting tooth and nail to slow down the security department because they are afraid of or don’t want to be inconvenienced by new features. As well as middle management advising engineers to leave a lot of tech debt behind so they can hit deadlines and look good.

Also fear if ai having significant influence on the market. What if an ai can outsmart the market by 1000x?

I don’t really want to deal with rentals either, but something such as owning a house on a bigger piece of land or some other way to store value in something physical as a hedge is something I think about

[leevs11]

I sold my STR and feel a relief. It needed work and took effort to get people in and out of the unit.

Granted, it would probably be worth more now and I'd still be bringing in some cash, but overall I think it was the right thing to do. I have most of it in index funds now and feel like it's a relief. That said, I'd be happy to own a primary residence and would like to own it outright at this point with the high interest rates.

[EscapeVelocity2020]

...
I have no plans to sell my rentals, I'll let my executors deal with it.

As a person who just inherited part of a real estate trust as well as an IRA, your heirs will definitely prefer the IRA.  But yeah, for the Settlor, real estate is just fine to hold until the end...

[b4u2]

I'm asking them same question. Do I keep this rental or sell. We have had 1 rental for the last 15 years. It was my wife's house when we got married. She tried to sell it and we have tried to sell it since being married. We didn't really make any money on it the first 9 years. We couldn't afford the payment on out own and we didn't want to scare off our tenant by raising rent. Since then we have raised rent a few times with new tenants. We have always had plenty of applicants and most were decent until this last. After 3 years we decided not to renew and were looking at selling the property. The realtor is a family friend. I also have a friend at church who is a managing partner in a local PM company. He's suggesting we take a hands off approach and let the PM run it for us. I haven't discussed fees or anything. It was just a conversation.
We have a retirement plan in place. Hopefully about 9 years from now we will retire. This rental was going to pay for a certain item and our main house for another item. We want to travel full time in the USA for a while. I know some will jump in but we have put a lot of planning into this. We have pensions and 401k that we will have access to. So these two houses are a "bonus" and we have an exit plan for when we decide to stop traveling.
The house we owe 74k at 4.1%. Realtor thinks we could sell for 140k. Just not sure if this is the right step or not. 10 more years of rent or try to sell and put that money somewhere else, like maybe pay down our main house? Too much for me to decide on my own right now. Tenants are out the end of August and we will need to fix up a few things. I guess we could try and sell it and see if it does actually get any offers at 140k?

[FINate]

We sold our rentals in early 2020. Dancing in the street relief. Seriously, one of the best decisions we've made.

We bought in the early 2010's when there were some very good deals. Property appreciated so quickly that value wasn't adequately compensated by rents. In other words, the capital could be put to better use elsewhere. Plus, we were relocating and didn't want to be long-distance landlords.

So we sold. It was worth it, even after the one-time tax bite for cap gains and depreciation recapture. No tenants doing all manor of strange things, like grow operations (water damage and fire risk, FTW!), or the time college dudes decided to start "composting" by throwing food scraps in an open container in the backyard which attracted all the neighborhood wildlife which then tore up the insulation and duct work under the property. Yeah, no regrets.

[clarkfan1979]

...
I have no plans to sell my rentals, I'll let my executors deal with it.

As a person who just inherited part of a real estate trust as well as an IRA, your heirs will definitely prefer the IRA.  But yeah, for the Settlor, real estate is just fine to hold until the end...

Yes, all things being equal the IRA is going to be less hassle. However, they typically are not equal. The real estate is typically worth much more because it's purchased with leverage and then the mortgage is paid off over time. When my son inherits 10 million worth of paid off real estate, I'm thinking he is going to prefer that over 2 million in an IRA. 

The way I understand it is that when I die and my wife dies and our son inherits the real estate, he gets the stepped-up basis when we transfer it and his capital gains taxes basically go to zero. How long does he have to hold onto the real estate before he sells? Anyone know? 

Edit: I want to also personally add that in my personal opinion, the true real estate investor is playing the long game. They are not buying and selling. Flippers do that, but not investors. I think it's common for a real estate investor to sell when they get older because the headaches are not worth it to them. They are rich and won the game, so what's the point.

I was kind of surprised by the number of people who claim to be real estate investors that sold in early 2020 and screamed from the rooftops that they got out just in time before the world came to an end. My typical response was, "Well, you might be right, but we will have to wait and see." Some had no interest in waiting. They wanted to immediately claim victory because they were 100% certain that real estate would not increase in value over the next 2-3 years.

There was a similar pattern for people who sold in early 2022, when interest rates were starting to rise. The advice was to "get out now" before everything goes to shit. I think the stock market was down 10% from the top and they were liquidating all their real estate and converting to index funds. Seems like a reasonable strategy, but it was difficult to observe the level of certainty that they were right and everyone else was wrong. Real estate is so local, it's almost an impossible claim to make.

I don't really try to time the market with my rentals. I try to buy in a good location and hold for the long term. If I sell, it's going to be mostly for personal reasons, not moving money for a higher ROI.   

[EscapeVelocity2020]

...
I have no plans to sell my rentals, I'll let my executors deal with it.

As a person who just inherited part of a real estate trust as well as an IRA, your heirs will definitely prefer the IRA.  But yeah, for the Settlor, real estate is just fine to hold until the end...

Yes, all things being equal the IRA is going to be less hassle. However, they typically are not equal. The real estate is typically worth much more because it's purchased with leverage and then the mortgage is paid off over time. When my son inherits 10 million worth of paid off real estate, I'm thinking he is going to prefer that over 2 million in an IRA. 

The way I understand it is that when I die and my wife dies and our son inherits the real estate, he gets the stepped-up basis when we transfer it and his capital gains taxes basically go to zero. How long does he have to hold onto the real estate before he sells? Anyone know? 

Edit: I want to also personally add that in my personal opinion, the true real estate investor is playing the long game. They are not buying and selling. Flippers do that, but not investors. I think it's common for a real estate investor to sell when they get older because the headaches are not worth it to them. They are rich and won the game, so what's the point.

I was kind of surprised by the number of people who claim to be real estate investors that sold in early 2020 and screamed from the rooftops that they got out just in time before the world came to an end. My typical response was, "Well, you might be right, but we will have to wait and see." Some had no interest in waiting. They wanted to immediately claim victory because they were 100% certain that real estate would not increase in value over the next 2-3 years.

There was a similar pattern for people who sold in early 2022, when interest rates were starting to rise. The advice was to "get out now" before everything goes to shit. I think the stock market was down 10% from the top and they were liquidating all their real estate and converting to index funds. Seems like a reasonable strategy, but it was difficult to observe the level of certainty that they were right and everyone else was wrong. Real estate is so local, it's almost an impossible claim to make.

I don't really try to time the market with my rentals. I try to buy in a good location and hold for the long term. If I sell, it's going to be mostly for personal reasons, not moving money for a higher ROI.

I started to give you a detailed response, but decided I'm not going to argue.  Maybe you have a perfect situation with just one person inheriting the real estate trust you leave behind.  I just know my situation, I am in a trust with my two sisters and it is a hassle.  We all agree on how to manage the property and don't have any horror stories, but getting my money out of the trust will still be a nightmare.  For the time being, I am just putting money in to the property for utilities, taxes, insurance, and upkeep. 

The IRA on the other hand has no strings attached.  I have transferred the funds to an inherited Vanguard IRA and am free to do as I please (including buying real estate, taking vacations, etc)... 

It's totally arbitrary to say which will grow faster in value, the real estate or the equities I buy, but with the IRA I am free to choose.  With the real estate I'm in a bind unless we all agree to sell, that's my main point. 

[clarkfan1979]

...
I have no plans to sell my rentals, I'll let my executors deal with it.

As a person who just inherited part of a real estate trust as well as an IRA, your heirs will definitely prefer the IRA.  But yeah, for the Settlor, real estate is just fine to hold until the end...

Yes, all things being equal the IRA is going to be less hassle. However, they typically are not equal. The real estate is typically worth much more because it's purchased with leverage and then the mortgage is paid off over time. When my son inherits 10 million worth of paid off real estate, I'm thinking he is going to prefer that over 2 million in an IRA. 

The way I understand it is that when I die and my wife dies and our son inherits the real estate, he gets the stepped-up basis when we transfer it and his capital gains taxes basically go to zero. How long does he have to hold onto the real estate before he sells? Anyone know? 

Edit: I want to also personally add that in my personal opinion, the true real estate investor is playing the long game. They are not buying and selling. Flippers do that, but not investors. I think it's common for a real estate investor to sell when they get older because the headaches are not worth it to them. They are rich and won the game, so what's the point.

I was kind of surprised by the number of people who claim to be real estate investors that sold in early 2020 and screamed from the rooftops that they got out just in time before the world came to an end. My typical response was, "Well, you might be right, but we will have to wait and see." Some had no interest in waiting. They wanted to immediately claim victory because they were 100% certain that real estate would not increase in value over the next 2-3 years.

There was a similar pattern for people who sold in early 2022, when interest rates were starting to rise. The advice was to "get out now" before everything goes to shit. I think the stock market was down 10% from the top and they were liquidating all their real estate and converting to index funds. Seems like a reasonable strategy, but it was difficult to observe the level of certainty that they were right and everyone else was wrong. Real estate is so local, it's almost an impossible claim to make.

I don't really try to time the market with my rentals. I try to buy in a good location and hold for the long term. If I sell, it's going to be mostly for personal reasons, not moving money for a higher ROI.

I started to give you a detailed response, but decided I'm not going to argue.  Maybe you have a perfect situation with just one person inheriting the real estate trust you leave behind.  I just know my situation, I am in a trust with my two sisters and it is a hassle.  We all agree on how to manage the property and don't have any horror stories, but getting my money out of the trust will still be a nightmare.  For the time being, I am just putting money in to the property for utilities, taxes, insurance, and upkeep. 

The IRA on the other hand has no strings attached.  I have transferred the funds to an inherited Vanguard IRA and am free to do as I please (including buying real estate, taking vacations, etc)... 

It's totally arbitrary to say which will grow faster in value, the real estate or the equities I buy, but with the IRA I am free to choose.  With the real estate I'm in a bind unless we all agree to sell, that's my main point.

I don't want to argue either. A real estate trust with 3 different people can be a hassle, depending on the guidelines of the trust and the people involved. If I was to split it up among multiple children, I would provide a clear exit strategy for each one if they wanted to get out.

My wife's grandfather left some land, a commercial strip mall and 4 rentals to his 2 kids in excess of 10 million with no mortgage. He verbally told them his wishes, but didn't put it in writing. He wanted the kids to keep the rentals and commercial buildings for the cash flow and sell the land if they wanted a big pay-out. He wanted a legacy of his properties being passed down to multiple generations. The kids sold 3/4 rentals, the commercial strip mall and kept the land. They didn't want the hassle. They were cool with keeping the land because the hassle factor is low. One rental is a low hassle factor, so they kept that as well. When they run low on funds in 5 years, I'm guessing they will sell the land and last rental. Pretty much zero chance any of that money makes it to the next generation. They are very determined to spend it all.     

Edit: There are 4 grandchildren. One grandchild is upset because they are now realizing that they won't get anything. They had a relationship with the grandfather and are aware of his multi-generation wishes. The kids sold the commercial strip mall off-market to a cold caller, which has been verified. The upset grand child claims that his dad sold it for 40% under market value. The under market value number has not been verified. I think it's just his opinion. The upset grandchild actually hired a lawyer to see if he could stop the sale (he wanted to claim that his dad had dementia, which he might have). Grandchild was told by the lawyer that there was nothing he could do. Since then the grand child stepped up their worth ethic and investing. Good for him. 

[Villanelle]

We are currently deciding whether to sell next summer then the lease is up, or continue on.  We have decent cash flow, but part of that is because we've been holding it for so long.  At today's prices, it would be a shit return.  We just replaced a/c and furnace (hi, $12k bill!).  Roof is only a matter of time, and will be a major PITA to replace because it is a duplex style townhouse and we'd have to get the neighbor (who also rents out his place) to agree to something.  I'm definitely torn.  We will be buying our own residence when we move, and it would be nice to have the massive downpayment from that sale.  OTOH, we could use our HELOC and keep the income from the rental. (Or sell some mutual fund investments, which I'm hardwired to avoid.)  And be done ever having to think about it, which is appealing. 

There's also some inertia at play.  What we are doing works.  But may not be ideal, especially in light of our plan to purchase.   I know I'd feel relieved to sell, assuming we got what seems like a decent price, but I'm not sure it's financially ideal.

All my rentals are on the same schedule. Yes that means technically ALL of them could turn over in the same 2 week period. And if your wondering yes its a shit ton of work.

Well I just got through it, and am done for another year. But at times I for sure was ready to be done with the whole mess and sell them all!

It's honestly not that bad now that I have done it a few times, but you need to be willing to set everything aside, and work 10 hours away for 6-7 days in a row. Having a relationship with a bunch of local handymen and fixers goes a long way! I guess I'd rather know I have 7 days of work at the end of July every year, then to spread that unevenly over the year. This yeah I had a bunch of dude-bros that did not once clean their house in 2 years, nor did they take care of their animals. So there was lot of work to do. Luckily my other units were prefectly fine so I paid the cleaner for them and called it a day.

So now in theory the rest of the year is smaller 1 hour jobs with calls to professionals to patch a roof or replace an A/C mixed in.

Sure I will feel tons of relief when I sell, because they ARE work, but they also are worth the headache for the payday (for now at least!)

Have you considered doing a 13 month lease (or 11) on one of them?  That still keeps everything closely grouped since you seem to prefer that, but might give you some breathing room. 

[Skyhigh]

“Land is the life-blood of this family. Never sell”. The Earl of Greystoke

I get the appeal of selling, however those who consistently win in RE investment never sell out. They may sell and buy something else that is better but never sell out of the market. RE is one of the few investment vehicles that continues to appreciate overtime and produces a compounding return in the form of increasing rents. Additionally, most of us are slowly paying off our mortgages so the lions share keeps increasing with each passing year.

You might be old and infirm at a nursing home, and you’ll be earning more money than ever before. The price of this fantastic return is the occasional stress of being a landlord. However, it is worth it.

Consider hiring a property manager. Buy more property so the pain will be spread out over a larger result. There are many options besides selling out.

[Jon Bon]

Have you considered doing a 13 month lease (or 11) on one of them?  That still keeps everything closely grouped since you seem to prefer that, but might give you some breathing room.

I have worked out deals to get folks out a week or 2 early when I have an especially large project to crank out. However that costs money, so to give up 1/12 of my gross revenues to make my life a little easier does not really feel worth it. That would make it more of a slow burn rather than a fire drill. So IMO the juice is worth the squeeze on this one. Its also primarily student housing so I have to follow the academic calendrer if I want to get tenants.

I've really not been over there much in the past 2 months. In part because they are in good shape, and in part because I kind of wore myself out and did not want to go over there.  I moved everyone early this year and compressed my already tight timeline to correspond to a family vacation the following week, I wont be doing that again!

The rentals still provide me about 4k of cash every month. That's  1 million invested at the 4% rule, and I do not have 1 mil in equity in them. So now when I am young enough to handle everything they throw at me they are worth keeping. Maybe in 20 years property manager or sell? Maybe this answer will change next July when I have to turn everything over again in 7 days!

I guess something else for folks to consider. 3% interest rates! I don't know how I did it honestly but all my rentals are between 3-4% interest. Which is a killer deal. It makes selling them even harder because interest costs are so low.

[clarkfan1979]

We are currently deciding whether to sell next summer then the lease is up, or continue on.  We have decent cash flow, but part of that is because we've been holding it for so long.  At today's prices, it would be a shit return. We just replaced a/c and furnace (hi, $12k bill!).  Roof is only a matter of time, and will be a major PITA to replace because it is a duplex style townhouse and we'd have to get the neighbor (who also rents out his place) to agree to something.  I'm definitely torn.  We will be buying our own residence when we move, and it would be nice to have the massive downpayment from that sale.  OTOH, we could use our HELOC and keep the income from the rental. (Or sell some mutual fund investments, which I'm hardwired to avoid.)  And be done ever having to think about it, which is appealing. 

There's also some inertia at play.  What we are doing works.  But may not be ideal, especially in light of our plan to purchase.   I know I'd feel relieved to sell, assuming we got what seems like a decent price, but I'm not sure it's financially ideal.

All my rentals are on the same schedule. Yes that means technically ALL of them could turn over in the same 2 week period. And if your wondering yes its a shit ton of work.

Well I just got through it, and am done for another year. But at times I for sure was ready to be done with the whole mess and sell them all!

It's honestly not that bad now that I have done it a few times, but you need to be willing to set everything aside, and work 10 hours away for 6-7 days in a row. Having a relationship with a bunch of local handymen and fixers goes a long way! I guess I'd rather know I have 7 days of work at the end of July every year, then to spread that unevenly over the year. This yeah I had a bunch of dude-bros that did not once clean their house in 2 years, nor did they take care of their animals. So there was lot of work to do. Luckily my other units were prefectly fine so I paid the cleaner for them and called it a day.

So now in theory the rest of the year is smaller 1 hour jobs with calls to professionals to patch a roof or replace an A/C mixed in.

Sure I will feel tons of relief when I sell, because they ARE work, but they also are worth the headache for the payday (for now at least!)

Have you considered doing a 13 month lease (or 11) on one of them?  That still keeps everything closely grouped since you seem to prefer that, but might give you some breathing room.

Are you saying that the rent is falling short of the 1% rule based on the current price or are you saying the overall return is shit after a long hold period?

[Chris Pascale]

Bought my first house in Oct., 2007 and rented it from 2009-2018 until a hurricane flooded it, and then sold in early 2020 when it was shiny and new.

I was happy to cash out.

It sold again for $40,000 more, and I felt good that the next guy made money on it.

[b4u2]

I'm asking them same question. Do I keep this rental or sell. We have had 1 rental for the last 15 years. It was my wife's house when we got married. She tried to sell it and we have tried to sell it since being married. We didn't really make any money on it the first 9 years. We couldn't afford the payment on out own and we didn't want to scare off our tenant by raising rent. Since then we have raised rent a few times with new tenants. We have always had plenty of applicants and most were decent until this last. After 3 years we decided not to renew and were looking at selling the property. The realtor is a family friend. I also have a friend at church who is a managing partner in a local PM company. He's suggesting we take a hands off approach and let the PM run it for us. I haven't discussed fees or anything. It was just a conversation.
We have a retirement plan in place. Hopefully about 9 years from now we will retire. This rental was going to pay for a certain item and our main house for another item. We want to travel full time in the USA for a while. I know some will jump in but we have put a lot of planning into this. We have pensions and 401k that we will have access to. So these two houses are a "bonus" and we have an exit plan for when we decide to stop traveling.
The house we owe 74k at 4.1%. Realtor thinks we could sell for 140k. Just not sure if this is the right step or not. 10 more years of rent or try to sell and put that money somewhere else, like maybe pay down our main house? Too much for me to decide on my own right now. Tenants are out the end of August and we will need to fix up a few things. I guess we could try and sell it and see if it does actually get any offers at 140k?

We put it up for sale and got what we wanted. We close on November 10th. Very happy to be done with it.

[almost]

We're selling our single rental.  We had a great tenant for 10 years but the property manager became more of a pain over time.  We got a good offer and are closing in the next 3 weeks.  I am grateful for the experience and the money we made, but am really looking forward to being done with this. 

[clarkfan1979]

We're selling our single rental.  We had a great tenant for 10 years but the property manager became more of a pain over time.  We got a good offer and are closing in the next 3 weeks.  I am grateful for the experience and the money we made, but am really looking forward to being done with this.

There is also a 3rd group of landlords that are not accounted for in this poll. Those who never sold.

How are you guys doing?

[Omy]

Sold one, kept one. Happy about both.

[Dicey]

We're selling our single rental.  We had a great tenant for 10 years but the property manager became more of a pain over time.  We got a good offer and are closing in the next 3 weeks.  I am grateful for the experience and the money we made, but am really looking forward to being done with this.

There is also a 3rd group of landlords that are not accounted for in this poll. Those who never sold.

How are you guys doing?

As mentioned upthread, the ill-conceived solar project was scrapped, so we're in Club Keep for the duration, whatever that turns out to be.

[Dicey]

We are currently deciding whether to sell next summer then the lease is up, or continue on.  We have decent cash flow, but part of that is because we've been holding it for so long.  At today's prices, it would be a shit return.  We just replaced a/c and furnace (hi, $12k bill!).  Roof is only a matter of time, and will be a major PITA to replace because it is a duplex style townhouse and we'd have to get the neighbor (who also rents out his place) to agree to something.  I'm definitely torn.  We will be buying our own residence when we move, and it would be nice to have the massive downpayment from that sale.  OTOH, we could use our HELOC and keep the income from the rental. (Or sell some mutual fund investments, which I'm hardwired to avoid.)  And be done ever having to think about it, which is appealing. 

There's also some inertia at play.  What we are doing works.  But may not be ideal, especially in light of our plan to purchase.   I know I'd feel relieved to sell, assuming we got what seems like a decent price, but I'm not sure it's financially ideal.

Have you considered a 1031 exchange? Sell the rental, buy the home you want to live in next, then rent it out for as long as the tax code requires (1 year? 2 years? - not sure exactly). Meanwhile, live in a different rental until you can move in. Seems like a hassle, but might save you a boatload in taxes.

[Villanelle]

We are currently deciding whether to sell next summer then the lease is up, or continue on.  We have decent cash flow, but part of that is because we've been holding it for so long.  At today's prices, it would be a shit return.  We just replaced a/c and furnace (hi, $12k bill!).  Roof is only a matter of time, and will be a major PITA to replace because it is a duplex style townhouse and we'd have to get the neighbor (who also rents out his place) to agree to something.  I'm definitely torn.  We will be buying our own residence when we move, and it would be nice to have the massive downpayment from that sale.  OTOH, we could use our HELOC and keep the income from the rental. (Or sell some mutual fund investments, which I'm hardwired to avoid.)  And be done ever having to think about it, which is appealing. 

There's also some inertia at play.  What we are doing works.  But may not be ideal, especially in light of our plan to purchase.   I know I'd feel relieved to sell, assuming we got what seems like a decent price, but I'm not sure it's financially ideal.

Have you considered a 1031 exchange? Sell the rental, buy the home you want to live in next, then rent it out for as long as the tax code requires (1 year? 2 years? - not sure exactly). Meanwhile, live in a different rental until you can move in. Seems like a hassle, but might save you a boatload in taxes.

We've thought about it but, while it makes some financial sense, if we are buying a place, we want to move in.  I desperately crave stability, after years of moving around, and I'm not interested in adding an extra move--even a local one--to my life.  Living in another rental for 2 years is something I'll happily (well...willingly) pay more taxes to avoid. 

[Dicey]

We are currently deciding whether to sell next summer then the lease is up, or continue on.  We have decent cash flow, but part of that is because we've been holding it for so long.  At today's prices, it would be a shit return.  We just replaced a/c and furnace (hi, $12k bill!).  Roof is only a matter of time, and will be a major PITA to replace because it is a duplex style townhouse and we'd have to get the neighbor (who also rents out his place) to agree to something.  I'm definitely torn.  We will be buying our own residence when we move, and it would be nice to have the massive downpayment from that sale.  OTOH, we could use our HELOC and keep the income from the rental. (Or sell some mutual fund investments, which I'm hardwired to avoid.)  And be done ever having to think about it, which is appealing. 

There's also some inertia at play.  What we are doing works.  But may not be ideal, especially in light of our plan to purchase.   I know I'd feel relieved to sell, assuming we got what seems like a decent price, but I'm not sure it's financially ideal.

Have you considered a 1031 exchange? Sell the rental, buy the home you want to live in next, then rent it out for as long as the tax code requires (1 year? 2 years? - not sure exactly). Meanwhile, live in a different rental until you can move in. Seems like a hassle, but might save you a boatload in taxes.

We've thought about it but, while it makes some financial sense, if we are buying a place, we want to move in.  I desperately crave stability, after years of moving around, and I'm not interested in adding an extra move--even a local one--to my life.  Living in another rental for 2 years is something I'll happily (well...willingly) pay more taxes to avoid.

I get it. I just didn't want it to be an option you hadn't thought of. When we did our last flip, we decided to just payeth the taxman. We haven't flipped anything since 2019, so it worked out for the best.

[AlexK]

I had 3 rentals and sold them in 2016, 2020, and 2021. So much relief. They were good investments and helped me to retire early for sure but it's not free money. I learned a lot about how disgusting a lot of people live. I've spent holiday a weekend ripping out cat pee soaked carpet. So many bad experiences. I had a property manager but they would just put in any tenant that staggered into their office it seemed. They would also call me when a tenant was late with the rent so they could make me out to be the bad guy instead of handling the problem that is their job to handle. The contractors they found would bid ridiculously high for simple repairs so I would end up doing most of them myself. Turns out their main contractor was the owner's son-in-law. This was the most respectable property manager in that town, the others were worse and did things like keep all late fees (which does nothing but incentivize them to find tenants who will pay them).

One con of real estate is the taxes when you sell. With stocks I can sell just a little bit each year to stay under the 0% CG tax threshold. Not with real estate, it's all or nothing in one tax year. I didn't get COVID stimulus checks because I made too much due to selling rental properties. I had to retract Roth IRA contributions and pay penalties because I decided to sell a property that year and made too much income because of it. If you have ACA health insurance it might prevent you from getting a subsidy that year. These things were worth it to me but things to consider before selling nonetheless.

[aasdfadsf]

They would also call me when a tenant was late with the rent so they could make me out to be the bad guy instead of handling the problem that is their job to handle.

That is...astounding. What the living hell do they thing their purpose is if they bother you when the rent is late? That is literally their job. That is why they get a cut, because they are supposed to deal with that shit and not you.

This kind of thing makes me glad that I manage my own properties. But it is a pain in the ass. And when the day comes to divest, I won't miss that part.

[Metalcat]

They would also call me when a tenant was late with the rent so they could make me out to be the bad guy instead of handling the problem that is their job to handle.

That is...astounding. What the living hell do they thing their purpose is if they bother you when the rent is late? That is literally their job. That is why they get a cut, because they are supposed to deal with that shit and not you.

This kind of thing makes me glad that I manage my own properties. But it is a pain in the ass. And when the day comes to divest, I won't miss that part.

Some areas don't have great professional management.

I was looking last year at a region with really great numbers and huge potential for property values rising, plus an area where I have a lot of family and might want to live someday. I really like buying rentals in places where I may want to live to prevent being priced out in the future since Canada's housing shortage isn't going away any time soon.

Anyhoo, there were just NO good property managers in the entire region. I spoke to a number of multifamily property owners there as many properties were FSBO because the Realtors there suck as well. Most of them were selling these great cash flowing properties because they were moving or had moved from the area and could not find anyone they could count on to manage them.

There's also a shortage of contractors in the area, so yeah, virtually all of the property managers were in bed with the contractors. Basically, the contractors in the area would talk a family member into getting into property management, mostly so that they could fleece distance investors.

Having tons of family there I tried everything I could to figure out a way to get decent management, but it just wasn't an option.

The demand is there and it will exist eventually, but the market conditions that make the place good for investors are recent and it will take time for the management infrastructure to exist to meet the demand.

The 3 locations where I own have a longstanding robust rental industry, so there are much more established professional management services. My property manager who manages my duplex is a fucking shark who I'm a little intimidated by.

I have no doubt I'm over charged by her contractors and that she's getting some kind of kickback for it. I'm okay with it because that's just the cost of doing business as hands off as I am right now. I'm in the middle of multiple leg surgeries and grad school, so I'm okay paying a premium for hassle-free management and maintenance, as long as it's reliable and well done. She also prices my units more aggressively than I would and is really good at finding great tenants, while I'm a bleeding heart who let my last tenants stay at a substantially reduced rent because they're a working class family with a special needs son. So I come out ahead with her managing it, even if she's screwing me on trades, lol.

But yeah, anywhere I have looked to buy, my biggest concern has always been the culture of property management in the area. It's a huge issue for long distance real estate investing.

[clarkfan1979]

They would also call me when a tenant was late with the rent so they could make me out to be the bad guy instead of handling the problem that is their job to handle.

That is...astounding. What the living hell do they thing their purpose is if they bother you when the rent is late? That is literally their job. That is why they get a cut, because they are supposed to deal with that shit and not you.

This kind of thing makes me glad that I manage my own properties. But it is a pain in the ass. And when the day comes to divest, I won't miss that part.

My wife has a friend that started her own property management company about 3-4 years ago. Her and her SO are both real estate agents. The last time we saw her she was going out to dinner to celebrate hitting 300 properties under management. Her focus has been on aggressive growth for her company. However, she finally told us that she is going to slow the growth going forward because her company is struggling to keep up with the current workload. I like her as a person, but there's no way I would ever have her manage our rentals.

As a landlord if you really want to scale, you kind of have to hire out property management or create your own team. I would be more likely to create my own team. I have heard very few landlords happy with their property management company.

I just got two quotes on my primary house for a new furnace. One company was $5750 and another $10,850 for the exam same product. When you have a property management company are they really going to call around and get the best deal? Probably not. 

[aasdfadsf]

I really like buying rentals in places where I may want to live to prevent being priced out in the future since Canada's housing shortage isn't going away any time soon.

Oh Canada!

I don't have anything useful to say about management or contractors, which I get is awful, but the Canadian government has decided that there will be lots more Canadians going forward. It is a very immigrant friendly country. The population might conceivably double in 20-30 years. Investments there are a fantastic idea. But how to deal with it, is...well...

[Metalcat]

I really like buying rentals in places where I may want to live to prevent being priced out in the future since Canada's housing shortage isn't going away any time soon.

Oh Canada!

I don't have anything useful to say about management or contractors, which I get is awful, but the Canadian government has decided that there will be lots more Canadians going forward. It is a very immigrant friendly country. The population might conceivably double in 20-30 years. Investments there are a fantastic idea. But how to deal with it, is...well...

Yep. Every policy is a double edged sword, the bigger the benefit of the policy, the bigger the consequences. Unfortunately when a problem needs to be solved over years by multiple levels of government working together, it's not likely to be solved in time to actually prevent the issue from being a crisis.

It requires a crisis for the political will within the public to exist for it to become an initiative that gets people elected.

But yes, the location where I own a duplex happens to be one of the fastest growing regions in the country with hundreds of millions in infrastructure spending happening over the next few years, with a lot of that infrastructure being useful for clean energy transition. So it's a very smart location to own, but really, I bought there because I like the location and want to be able to live there and not be priced out in the future.

[Villanelle]

Interesting thoughts on considering political realities and potental future implications on the housing market.

One of the things pushing me toward selling our rental early next year isn't directly political.  But I'm looking at climate change.  One thing tht makes Sourthern CA, especially within about 10-15 miles of the coast, so attractive is the weather.  It's mild year round, rain is rare (more rare than needed to support all the life there) and there are almost no severe weather events.  But the area just got slammed by the first tropical storm since 1939.  There's decent reason to think it won't be another 84 years before the next one.  The hot weather is likely to be hotter--so much for the mild, everyday-is-comfortable weather.  Wildfires will be even more common.  Droughts will be increasingly problematic, even while severe rain storms also cause mudslides and other havoc.  In other words, it seems there is very sold reason to believe that one of the things that makes SoCal so desirable and causes people to pay a premium (literally, when it comes to insurers who are either pulling out entirely or massively increasing rates when legally allowed, because they see all these risks, too) to live there are going away.

Now, these effects aren't going to be immediate.  Even as the weather and other conditions start changing, many people will be unwilling or unable to pick up and move.  But some will.  To me, that doesn't bode well for rents--not in a year or 2, perhaps,  But in 5-10-15 years.  It feels like yet another reason to pull out.

I'm not a market timer, and this reason does feel a bit like that.  It's far from an only or main factor. But it does help validate my inclination that this is probably a good time for me to exit landlording.

(San Diego, where my property is located, was recently named the least city in the US. I'll cash in on those high housing prices--which means losing the high rent collections--now.  Maybe this will turn out to have been a bad decision in a decade, but I think I'll sleep fine at night, especially because the proceeds will likely go toward buying a residence once we move.  And a bigger downpayment means less money financed at %7+)

[clarkfan1979]

Interesting thoughts on considering political realities and potental future implications on the housing market.

One of the things pushing me toward selling our rental early next year isn't directly political.  But I'm looking at climate change.  One thing tht makes Sourthern CA, especially within about 10-15 miles of the coast, so attractive is the weather.  It's mild year round, rain is rare (more rare than needed to support all the life there) and there are almost no severe weather events.  But the area just got slammed by the first tropical storm since 1939.  There's decent reason to think it won't be another 84 years before the next one.  The hot weather is likely to be hotter--so much for the mild, everyday-is-comfortable weather.  Wildfires will be even more common.  Droughts will be increasingly problematic, even while severe rain storms also cause mudslides and other havoc.  In other words, it seems there is very sold reason to believe that one of the things that makes SoCal so desirable and causes people to pay a premium (literally, when it comes to insurers who are either pulling out entirely or massively increasing rates when legally allowed, because they see all these risks, too) to live there are going away.

Now, these effects aren't going to be immediate.  Even as the weather and other conditions start changing, many people will be unwilling or unable to pick up and move.  But some will.  To me, that doesn't bode well for rents--not in a year or 2, perhaps,  But in 5-10-15 years.  It feels like yet another reason to pull out.

I'm not a market timer, and this reason does feel a bit like that.  It's far from an only or main factor. But it does help validate my inclination that this is probably a good time for me to exit landlording.

(San Diego, where my property is located, was recently named the least city in the US. I'll cash in on those high housing prices--which means losing the high rent collections--now.  Maybe this will turn out to have been a bad decision in a decade, but I think I'll sleep fine at night, especially because the proceeds will likely go toward buying a residence once we move.  And a bigger downpayment means less money financed at %7+)

Was San Diego ranked the least affordable city? Is this based on wages and cost of living?

I lived in San Diego 1998 to 2006. It's probably my favorite city of all-time, however, I do agree that it's less desirable now than when I lived there and somewhat related to climate change. Once you get 1 mile away from the beach, I feel like it is hotter now. The snowboarding in the local mountains (Big Bear) seems to have a shorter season now compared to 25 years ago.

I now live in Colorado and have a vacation home/rental home in Hawaii. The snowboarding is better in Colorado and the surfing is better in Hawaii. My 1.2 million house in Hawaii would probably be 1.8 million in San Diego.

[Villanelle]

Interesting thoughts on considering political realities and potental future implications on the housing market.

One of the things pushing me toward selling our rental early next year isn't directly political.  But I'm looking at climate change.  One thing tht makes Sourthern CA, especially within about 10-15 miles of the coast, so attractive is the weather.  It's mild year round, rain is rare (more rare than needed to support all the life there) and there are almost no severe weather events.  But the area just got slammed by the first tropical storm since 1939.  There's decent reason to think it won't be another 84 years before the next one.  The hot weather is likely to be hotter--so much for the mild, everyday-is-comfortable weather.  Wildfires will be even more common.  Droughts will be increasingly problematic, even while severe rain storms also cause mudslides and other havoc.  In other words, it seems there is very sold reason to believe that one of the things that makes SoCal so desirable and causes people to pay a premium (literally, when it comes to insurers who are either pulling out entirely or massively increasing rates when legally allowed, because they see all these risks, too) to live there are going away.

Now, these effects aren't going to be immediate.  Even as the weather and other conditions start changing, many people will be unwilling or unable to pick up and move.  But some will.  To me, that doesn't bode well for rents--not in a year or 2, perhaps,  But in 5-10-15 years.  It feels like yet another reason to pull out.

I'm not a market timer, and this reason does feel a bit like that.  It's far from an only or main factor. But it does help validate my inclination that this is probably a good time for me to exit landlording.

(San Diego, where my property is located, was recently named the least city in the US. I'll cash in on those high housing prices--which means losing the high rent collections--now.  Maybe this will turn out to have been a bad decision in a decade, but I think I'll sleep fine at night, especially because the proceeds will likely go toward buying a residence once we move.  And a bigger downpayment means less money financed at %7+)

Was San Diego ranked the least affordable city? Is this based on wages and cost of living?

I lived in San Diego 1998 to 2006. It's probably my favorite city of all-time, however, I do agree that it's less desirable now than when I lived there and somewhat related to climate change. Once you get 1 mile away from the beach, I feel like it is hotter now. The snowboarding in the local mountains (Big Bear) seems to have a shorter season now compared to 25 years ago.

I now live in Colorado and have a vacation home/rental home in Hawaii. The snowboarding is better in Colorado and the surfing is better in Hawaii. My 1.2 million house in Hawaii would probably be 1.8 million in San Diego.

Opps, yes.  Least affordable, by US News and World Report.  I've couldn't find the methodology, but articles about the report suggest it is based either mostly or entirely on housing and housing-related costs.

If money was truly no object, I'd live in Coronado.  But we've likely both have to work until the day we die, to afford a crappy old townhouse there and still have money be tight.