Sell. Cut the ties and be free.

Sell, no worries on this side about the tenants, and you will have the cash readily available when you find a house on the other end.

Hi all, I've found this thread through the Google The thing is I'm in similar situation, except I live in Silicone Valley and I'm moving back to Europe and I don't need any downpayment to buy my next house. I bought my house 2 years ago and I can get ~$200k *profit* tax-free after all commissions if I sell it now, real estate appreciated 30-40% here for the last couple of years. I have 15y mortgage so the rental would be cash-negative, I'll have to add ~15k/year out of pocket to keep the house. On the other hand real estate here in Silicone Valley historically appreciates like craze, at least 5%/year for the last 20 years, and tenants are generally well-mannered engineers. I'm in doubts what to do.

Sell it! It's not worth the hassle of renting especially if you're no longer living within the DC area.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Sell.

Your neighbors, ok all neighbors, would prefer to have on site homeowners to keep up the outside of the house (yardwork, flowers, paint, fences) and it's hard to create community in a SFH neighborhood with tenants moving in and out.

Why should the neighbors have a say? If it's one block from the Metro, how stable is the long term viability of the neighborhood anyway?

OP, if you have other rental properties, I'm guessing you have the expertise, either on your own or hired, to know what makes the most sense. Are any of your other rental properties better poised for selling?

Did you live in a SFH or are you a renter?

If the prior, I am going out a limb to say that you would prefer to have other stable homeowners living next store, keeping their house nice looking and the neighborhood value up, and not have a turnover of folks moving in and out and in and out.

If pp, you are a renter, of course you don't care about this (and don't have the money invested in a home such that you don't want a junker next door after years of rental turnover and neglect).

I am currently a homeowner, but we lived in a rental in a residential neighborhood before this. We did our part to keep things nice and were on friendly terms with the neighbors. No one seemed bothered by the fact we were renters. For what a house that close to the metro will rent for, I don't think you have to worry about junker cars, just your own ability to be sociable.

Sell, if you never plan to return!!

Here's what I would do. Since you are living here now, I would do a cash out refi at a low 30 year fixed rate.

You'll then have money for a down payment on your new house, you'll have a low 30 year fixed rate on your newly converted rental (where do you think rates will be 10 years from now? I don't know, but I'm guessing higher! Also, if this is a gentrifying area, your rents will be much higher in 10 years while your mortgage remains the same). It may not cashflow at 500-600/month now, but it will in the future.

Anonymous wrote:I'd sell. I have a rental property, it isn't worth it really. Also once you convert this into a rental, you will have to pay capital gains taxes if/when you eventually sell it. If you sell it right now, you can exempt $250,000 in capital gains taxes because you live in the house. Once you turn it into a rental, you can't do that.

He can rent for three years before that happens.

For god's sake sell! One bad tenant and there goes all your profit you've ever made on the deal.

OTOH, you're used to being an investor/owner.

OTOH, keeping it cuts into your needed capital now.

I'd sell... you have a gain.

Waiting to speculate on more gain when you could use the capital now reminds me of my grandfather's saying (stockbroker) that "bulls make money and bears make money but hogs get slaughtered." ;-o

I'd sell. I have a rental property, it isn't worth it really. Also once you convert this into a rental, you will have to pay capital gains taxes if/when you eventually sell it. If you sell it right now, you can exempt $250,000 in capital gains taxes because you live in the house. Once you turn it into a rental, you can't do that.

I would reiterate earlier questions about is this in DC... if the answer is yes I'd definitely sell. VA or MD, maybe or maybe not. The experience of having a rental property already doesn't give you the experience of trying to sell one and that can be a PITA to do (or even to just get rid of tenants) in DC which is hugely in favor of the renter.

As to financial decisions, I think whether it would be a good one to keep it depends in part on how old it is and what shape it's in. If you can foresee big updates needed in the coming years I'd get rid of it now. You may lose out on some money if the market continues to go up - but if that's the case don't use all of it for a down payment on the new house, invest some of it.

Anonymous wrote:

Anonymous wrote:Sell.

Your neighbors, ok all neighbors, would prefer to have on site homeowners to keep up the outside of the house (yardwork, flowers, paint, fences) and it's hard to create community in a SFH neighborhood with tenants moving in and out.

Why should the neighbors have a say? If it's one block from the Metro, how stable is the long term viability of the neighborhood anyway?

OP, if you have other rental properties, I'm guessing you have the expertise, either on your own or hired, to know what makes the most sense. Are any of your other rental properties better poised for selling?

Did you live in a SFH or are you a renter?

If the prior, I am going out a limb to say that you would prefer to have other stable homeowners living next store, keeping their house nice looking and the neighborhood value up, and not have a turnover of folks moving in and out and in and out.

If pp, you are a renter, of course you don't care about this (and don't have the money invested in a home such that you don't want a junker next door after years of rental turnover and neglect).

Anonymous wrote:OP here. It's a SFH. That's the kicker here. 4 bd SFH 1 block from metro. There is definitely value here. I won't name which one.

And yes, 1 block from metro, it's mostly rentals anyway. Not like there is a great sense of community with stable owners.

I am undecided at this point. Not having the 200K as a downpayment on the next house, means that I have to buy less house than what I'd prefer. But willing to take that sacrifice if it means keeping the current as rental is long-term a better financial choice.

I would say rent it for at least a 1-2 years and then re-evaluate the market if you still want to sell. There's no way that you won't be profiting nicely on a SFH within that distance to the metro. In the DC area, rental prices are only going up. I think the profit on renting will eventually outweigh your want to have extra house where you will live next. You can always move up to a better house in your new area if you re-evaluate and sell this house in a few years.

Your numbers tells me that you probably have some equity in this house. Maybe HELOC as down payment on new one will work? I would talk to a mortgage broker.