Why do people sell their houses?

[Anonymous]

Because a house is never paid for. There is always taxes, insurance, maintenance.

[Anonymous]

Anonymous wrote:Isn't it wise to keep them as investment properties if they are not too hard to maintain and not long distance? Shouldn't they hold as long as they can? Look how much price has gone up. [url]When parents move to nursing homes or pass away, [b]why are their children eager to sell and split money? Can't they rent for as long as possible? I only get empty nesters who downsize from mansions which are not good investments.

Many times by the time elderly family members pass away or head to a nursing home, those older houses are quite outdated and/or in a state of disrepair. It’s difficult enough to settle an estate, without also having to come up with $20-150k+ to do needed repairs. Plus, sometimes it’s emotionally difficult to see others living in a loved one’s home, especially if the new renters aren’t taking very good care of it.

Most of my family members live in areas with high(ish) real estate taxes, but otherwise low cost of living (low rents) - what little we could possible clear in rent just isn’t worth the time and hassle.

[Anonymous]

Not everyone is so wealthy that they don’t need the equity from the first house for the down payment on the new house

[Anonymous]

Anonymous wrote:Not everyone is so wealthy that they don’t need the equity from the first house for the down payment on the new house

This: we sold in order to move up. Or if I inherited a house, I'd have immediate uses for the money from the sale.

I agree with all the PPs about the trials of landlording, but also sometimes you just need the money for other things.

[Anonymous]

I would have loved to keep my old townhouse as a rental but my closing on the new SFH was 600k and I couldn’t come up with that much cash otherwise.

[Anonymous]

I generally agree that most times it makes more sense to sell and invest then to keep as an investment/rental. However, I did keep our first single family home in NoVA as an investment property when we moved to a larger house 15 years ago. I kept and rented because (1) didn't need the equity, (2) I wanted to diversify investments away from stocks/401ks, (3) I moved only 1/2 mile away so could manage the property and show/lease the house myself, (4) I rent only to senior military officer families that have been great tenants, (5) wanted to take advantage of appreciation in our area (house has roughly tripled in value since buying 25 years ago). Only renting to senior military has been the best move as it has avoided the biggest issue in being a landlord-- bad tenants. Again, this route is not for everyone but there are situations where it can make sense.

[Anonymous]

We've had investment properties and invested in the market and hands down have done better in the market.

We own a rowhome in DC with a basement rental that covers the mortgage and that is the only rental property we have ever had that makes any financial sense.

[Anonymous]

Anonymous wrote:

Anonymous wrote:You’re making a rich people argument. The other 90% isn’t able to afford it.

Quite the opposite. Very rich people aren't landlords; they might own many houses but they don't rent any of them out. They know that their money is better invested in the stock market.

You're missing the point. It has nothing to do with the very rich and what they do or don't do with their homes. It has everything to do with the fact that the vast majority of people need to sell their current home to afford the down payment on their next one. It's like the entire basis of the property ladder.

[Anonymous]

Anonymous wrote:

Anonymous wrote:You’re making a rich people argument. The other 90% isn’t able to afford it.

Quite the opposite. Very rich people aren't landlords; they might own many houses but they don't rent any of them out. They know that their money is better invested in the stock market.

It's like the folks around here have never heard of diversifying ...

This is not a bad time to have some money in real estate.

[Anonymous]

Tried it out for a couple of years. Tenants were gross and property value diminished due to their refusal to maintain it. Definitely not for me and won't ever do it again.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:You’re making a rich people argument. The other 90% isn’t able to afford it.

Quite the opposite. Very rich people aren't landlords; they might own many houses but they don't rent any of them out. They know that their money is better invested in the stock market.

It's like the folks around here have never heard of diversifying ...

This is not a bad time to have some money in real estate.

But if you own your home you already have money in real estate. I wouldn’t want more money than the value if my current house ($2M) in one real estate market. Also being a landlord is a PITA.

[Anonymous]

Property taxes.

[Anonymous]

Just inherited a home in Southern California. Value 3m. Could rent for 10-12k month but property tax and insurance (esp wildfire) is 45k/year, then add 10k in property management fees and 5k in upkeep and I’m netting 60-80k. That’s without vacancies or major repairs. Meanwhile I can sell and invest 3m in the market conservatively and more than double that, plus it’s liquid.

That being said I would consider a real estate investment elsewhere—buy an inexpensive rental elsewhere , but in Southern California home ownership is so expensive, even if the house is owned outright and tenant laws make it very difficult to evict if you want to sell or even if tenant does not pay.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:You’re making a rich people argument. The other 90% isn’t able to afford it.

Quite the opposite. Very rich people aren't landlords; they might own many houses but they don't rent any of them out. They know that their money is better invested in the stock market.

It's like the folks around here have never heard of diversifying ...

This is not a bad time to have some money in real estate.

Just find a diversified REIT index fund. I have one in my portfolio and it’s dramatically underperformed as compared to my S&P index fund. But if you really want real estate exposure, you certainly don’t need to own real estate itself with all the hassles and expenses that come along with it.

[Anonymous]

Most of us normal people with normal incomes don't have the money to carry a rental property, especially one that will sell for a million. I have to sell my place to buy the next one.