Reply to Rent current house or sell and invest?

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Reply to "Rent current house or sell and invest?"

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]I don't understand why you would not put the proceeds from the sale toward the new house when mortgage rates are 6 percent.[/quote]

This. Being a landlord, supervising major renovations where you won't be able to have a tenant (nobody will rent a place while the roof and HVAC are being redone), losing the capital gains exclusion and the homestead deduction...there are easier ways to make money, like having a smaller mortgage payment on the house you live in.[/quote]

We are in MD. I thought you were exempt from capital gains if lived in house for &gt;2 yrs and make less than 500K off the house? Also wouldnt we get homestead deduction on new house?[/quote]

You lose the cap gains exemption of you haven’t lived in the house 2 of the last 5 years— so if you rent more than three years it goes away (also you will have to deal with depreciation recapture for the time it is rented).

The cap gains exemption and the problems of being a landlord are the two biggest reasons not to rent it out, imo[/quote]

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