Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:"Starter" homes/condos are incredibly stupid.

Disagree. I've been renting the townhouse I bought before I got married. I've had great luck with tenants and manage it myself. The rent is more than 2x the mortgage payment and I've been able to pay off most of the loan. I bought for under 200k. They are selling for around $500k now. The mortgage is under 30k.

Just wait to you have to pay taxes on that profit...

The taxes aren't that bad they are usually under you payroll taxes so not a big deal. Remember if you make a 1000 dollars and pay 20% that is still 800 bucks you didn't have before. Bad notion of not making money cause you have to pay taxes on it.

But if she sells it while it's her primary residence, or within the next two years, she will get $300k tax free. If not, she will pay about $60k in taxes. You think that's chump change?

The house will still continue to appreciate. Rents will increase. Sell in 10yrs could have substantially more than the 300k. Who cares it you pay 60k out of 300k. That is 240k you didn't have before. You are going to pay taxes and the losses they can accumulate on the house from improvement and repairs can counter a lot of the taxes even with the recapture of the depreciation. Bad notion not make money cause you have to pay taxes on it.

+1

The difference of someone thinking long term about their finances and that grab it while it's hot mentality that so many suffer from and still don't know why they are struggling financially.

Same question, different numbers.

Bought a 4br townhouse for 480k in Petworth. The neighborhood is hot and our home is likely worth 550k now. We owe 350k on the mortgage, only 2.1k monthly payment, 150k savings, and no other debt. We also contribute to retirement. Thinking about an upgrade to a home in the 600k-800k range in 2 yrs. Could probably rent out the current house at $2.6/mo or more, and save the difference for expenses. Wouldn't expect to make a profit in rent, only in home equity years from now.

The long term investor in me says to rent out the house. The risk-averse part of me says robots are coming for our jobs, so sell the house and pocket the profit for kids' college (17 years away).

Any input would be appreciated.

Anonymous wrote:
Disagree. I've been renting the townhouse I bought before I got married. I've had great luck with tenants and manage it myself. The rent is more than 2x the mortgage payment and I've been able to pay off most of the loan. I bought for under 200k. They are selling for around $500k now. The mortgage is under 30k.

So what? People also win Powerball.

Anonymous wrote:OP - sorry haven't checked this thread in last 24 hours. I want to clarify that reason note is so low on house is I've been putting my bonus to pay down HELOC. My cap gains would only be around $100k if I sold the house, not $300k.

It seems the "keep it and rent" folks have started chiming in. I have 2 years to see how I like renting and can still sell and take the gain tax free. I may do that as an experiment. May also be better bc I likely won't close on new house until August which puts me out of the selling season on old house.

The 300k capital gains applies to me (the one with the townhouse). The guy posting about having capital gains as a reason not to rent a home is ridiculous. I'd rather owe money because my money is growing and working for me. I'm also able to depreciate things as well...my money will have made more renting it then elsewhere.

OP - sorry haven't checked this thread in last 24 hours. I want to clarify that reason note is so low on house is I've been putting my bonus to pay down HELOC. My cap gains would only be around $100k if I sold the house, not $300k.

It seems the "keep it and rent" folks have started chiming in. I have 2 years to see how I like renting and can still sell and take the gain tax free. I may do that as an experiment. May also be better bc I likely won't close on new house until August which puts me out of the selling season on old house.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:"Starter" homes/condos are incredibly stupid.

Disagree. I've been renting the townhouse I bought before I got married. I've had great luck with tenants and manage it myself. The rent is more than 2x the mortgage payment and I've been able to pay off most of the loan. I bought for under 200k. They are selling for around $500k now. The mortgage is under 30k.

Just wait to you have to pay taxes on that profit...

The taxes aren't that bad they are usually under you payroll taxes so not a big deal. Remember if you make a 1000 dollars and pay 20% that is still 800 bucks you didn't have before. Bad notion of not making money cause you have to pay taxes on it.

But if she sells it while it's her primary residence, or within the next two years, she will get $300k tax free. If not, she will pay about $60k in taxes. You think that's chump change?

The house will still continue to appreciate. Rents will increase. Sell in 10yrs could have substantially more than the 300k. Who cares it you pay 60k out of 300k. That is 240k you didn't have before. You are going to pay taxes and the losses they can accumulate on the house from improvement and repairs can counter a lot of the taxes even with the recapture of the depreciation. Bad notion not make money cause you have to pay taxes on it.

Are you not aware that other assets appreciate too? In particular, assets whose value is less strongly correlated with the value of your primary residence than another house?

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:"Starter" homes/condos are incredibly stupid.

Disagree. I've been renting the townhouse I bought before I got married. I've had great luck with tenants and manage it myself. The rent is more than 2x the mortgage payment and I've been able to pay off most of the loan. I bought for under 200k. They are selling for around $500k now. The mortgage is under 30k.

Just wait to you have to pay taxes on that profit...

The taxes aren't that bad they are usually under you payroll taxes so not a big deal. Remember if you make a 1000 dollars and pay 20% that is still 800 bucks you didn't have before. Bad notion of not making money cause you have to pay taxes on it.

But if she sells it while it's her primary residence, or within the next two years, she will get $300k tax free. If not, she will pay about $60k in taxes. You think that's chump change?

The house will still continue to appreciate. Rents will increase. Sell in 10yrs could have substantially more than the 300k. Who cares it you pay 60k out of 300k. That is 240k you didn't have before. You are going to pay taxes and the losses they can accumulate on the house from improvement and repairs can counter a lot of the taxes even with the recapture of the depreciation. Bad notion not make money cause you have to pay taxes on it.

+1

The difference of someone thinking long term about their finances and that grab it while it's hot mentality that so many suffer from and still don't know why they are struggling financially.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:"Starter" homes/condos are incredibly stupid.

Disagree. I've been renting the townhouse I bought before I got married. I've had great luck with tenants and manage it myself. The rent is more than 2x the mortgage payment and I've been able to pay off most of the loan. I bought for under 200k. They are selling for around $500k now. The mortgage is under 30k.

Just wait to you have to pay taxes on that profit...

The taxes aren't that bad they are usually under you payroll taxes so not a big deal. Remember if you make a 1000 dollars and pay 20% that is still 800 bucks you didn't have before. Bad notion of not making money cause you have to pay taxes on it.

But if she sells it while it's her primary residence, or within the next two years, she will get $300k tax free. If not, she will pay about $60k in taxes. You think that's chump change?

The house will still continue to appreciate. Rents will increase. Sell in 10yrs could have substantially more than the 300k. Who cares it you pay 60k out of 300k. That is 240k you didn't have before. You are going to pay taxes and the losses they can accumulate on the house from improvement and repairs can counter a lot of the taxes even with the recapture of the depreciation. Bad notion not make money cause you have to pay taxes on it.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:"Starter" homes/condos are incredibly stupid.

Disagree. I've been renting the townhouse I bought before I got married. I've had great luck with tenants and manage it myself. The rent is more than 2x the mortgage payment and I've been able to pay off most of the loan. I bought for under 200k. They are selling for around $500k now. The mortgage is under 30k.

Just wait to you have to pay taxes on that profit...

The taxes aren't that bad they are usually under you payroll taxes so not a big deal. Remember if you make a 1000 dollars and pay 20% that is still 800 bucks you didn't have before. Bad notion of not making money cause you have to pay taxes on it.

But if she sells it while it's her primary residence, or within the next two years, she will get $300k tax free. If not, she will pay about $60k in taxes. You think that's chump change?

Anonymous wrote:I disagree with almost everyone here.

I am not sure why you wouldn't keep it. You'd clear alot in rent and have the equity even if you sell in 5-10 years. Build up a sizable fund for repairs or gaps in renters. There are tax implications to the rental income, but we kept our first house because we were under water and it has been a great investment over time. We make money and build equity. It was recently redone so there have been minor repairs, but that is it. We've also had good renters.

Your would have had to put money out of pocket to sell your old home. OP appears to have a large tax free gain...PLUS it is a great time to be a seller! Sell OP!!

Anonymous wrote:I disagree with almost everyone here.

I am not sure why you wouldn't keep it. You'd clear alot in rent and have the equity even if you sell in 5-10 years. Build up a sizable fund for repairs or gaps in renters. There are tax implications to the rental income, but we kept our first house because we were under water and it has been a great investment over time. We make money and build equity. It was recently redone so there have been minor repairs, but that is it. We've also had good renters.

Your key point is that you were "under water" and I would have done the same. Op has a sizable gain which will be tax free. Try placing yourself in OP situation, not yours....not the same at all.

You only have two years after move out to take all of your $460K tax free....there is no other investment opportunity that I know of where you are exempt tax free.

I disagree with almost everyone here.

I am not sure why you wouldn't keep it. You'd clear alot in rent and have the equity even if you sell in 5-10 years. Build up a sizable fund for repairs or gaps in renters. There are tax implications to the rental income, but we kept our first house because we were under water and it has been a great investment over time. We make money and build equity. It was recently redone so there have been minor repairs, but that is it. We've also had good renters.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:"Starter" homes/condos are incredibly stupid.

Disagree. I've been renting the townhouse I bought before I got married. I've had great luck with tenants and manage it myself. The rent is more than 2x the mortgage payment and I've been able to pay off most of the loan. I bought for under 200k. They are selling for around $500k now. The mortgage is under 30k.

Just wait to you have to pay taxes on that profit...

The taxes aren't that bad they are usually under you payroll taxes so not a big deal. Remember if you make a 1000 dollars and pay 20% that is still 800 bucks you didn't have before. Bad notion of not making money cause you have to pay taxes on it.

Anonymous wrote:Current home is worth $585k. Owe $90k on a HELOC. Looking to move up to something in the $850k range.

Option A: sell house (clearing $460k) and then get a $390k mortgage on new place.

Option B: tap current HELOC for $225k down payment and then get $625k mortgage on new house (which would then be conforming). I can rent the current house to an O4, which would be $3100/month. The new HELOC balance of $315k would be around $1500, and taxes and insurance is another $500, so I would clear $1100/month before maintenance. I would accelerate the HELOC balance as I have done the last few years.

Thoughts? Suggestions?

See your accountant about the huge tax advantages you will get from a rental. Those taxes that others have mentioned are deductible. Renting a home is one of the last tax shelters out there. If you can clear that much after paying the mortgage you also put yourself in a good position financially down the road. If you are going to manage do so but don't be more than 1/2 hr away from the property. Get a fleet of reliable contractors, electricians, plumbers and general maintenance people and keep the house in tip top condition, all those repairs are also deductible in the year they are made.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:"Starter" homes/condos are incredibly stupid.

Disagree. I've been renting the townhouse I bought before I got married. I've had great luck with tenants and manage it myself. The rent is more than 2x the mortgage payment and I've been able to pay off most of the loan. I bought for under 200k. They are selling for around $500k now. The mortgage is under 30k.

Just wait to you have to pay taxes on that profit...

That's easily the dumbest thing I've read on DCUM today. "Don't make more money! You'll owe taxes!!"