Should we sell Dupont condo?
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Anonymous
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We own a 2 bedroom, 2 bath, 1,000 sf condo in the heart of Dupont - my husband bought it 23 years ago as a bachelor.
We've been renting it out for the past year after we moved to MoCo, where we bought a home, on which we have a 200k mortgage (house was appraised at 1.1 million). Tenants are moving out, and we're thinking about selling to let go of the hassle of renting, to pay off the mortgage, and to invest the rest of the money in non-real estate. Otherwise, we have about 100K in savings, and a total of 100k in 401ks. It's been a rental property for the last 4 of 5 years, so we'd have to pay capital gains. Is it stupid to think about selling this? |
Anonymous
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Whose name is on the title?
Right now a very large proportion of your wealth is in the DC area real estate. |
Anonymous
So it would make sense to diversify? |
Anonymous
Answer the first question |
Anonymous
| Husband's - though if we keep it, we'll move it to our living trust. |
Anonymous
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So if you divorce, you realize that's his asset and you have no right to any portion of it?
From your perspective, you should sell and put the profits in investments with both names on the account. Or put your name on the title. |
Anonymous
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Do you still have a mortgage on it? How much is it rented for? What's your profit? Can you picture yourselves moving back into it after your kids are grown? Won't you need the rental income in retirement if you only have $100K in your 401Ks in your mid-40s?
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Anonymous
| Op here - we don't have a mortgage. The rental income balances the expenses plus the mortgage on our primary residence. If we sold it, then we'd pay off our primary mortgage (leaving our very low interest student loans as our only debt). We wouldn't move back there. And re: rental income in retirement - we'd move the money in a non-real estate investment to diversify our assets. |
Anonymous
| Any major repairs on the horizon for the condo? I'm talking HVAC, windows, roof-major common element repairs. Those assessments can kill your profits. Go to a condo meeting and see what is coming up. If any repairs would be more than the cap. gains, then sell. If not, keep it (imo). |
Anonymous
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so your net worth right now is
assets Mont Co home $1,100k Dupont condo ? I'll assume = $400k Savings $100k 401(k) accounts $100k Liabilities Mortgage on Mont Co $200k Student loans I would sell the Dupont condo, keep the Mont Co mortgage, and invest the condo proceeds in a 60% equity / 40% fixed income portfolio, with globally diversified equities. The $100k savings are your "rainy day" fund and should be in cash/ short term fixed income. |
Anonymous
| We're looking for a place that size, we could buy it from you! |
Anonymous
2br in DuPont? Has to be at least $8-900k, likely more. I'd keep it for the income and sell in retirement. |
Anonymous
+1 The thing is carrying your primary mortgage - don't let go of it. |
Anonymous
OP here - thank you for the feedback. In selling it, we can easily pay off the primary mortgage, and have $300-$400K "left over" to invest in other ways - which is the way that we are leaning. I think we are also realizing that being a landlord is a pain in the a**, even with great tenants. Also also - we just made some major upgrades within the past 2 years (for us as owners occupants - we just moved out of it last year), and in a few more years, that will need to be done again. The unit is definitely steps above a "rental unit." |
Anonymous
Assume 400k? I shall now ignore everything else you say as ignorant. |