What to do with Primary Residence?

[David Beadles]

Hi everyone,

Our purchase offer was accepted for a new primary residence and we need to decide what to do with our current 4BR/3BA home. We did some remodeling and are sitting on at least $200k of gain if we sold today. However, we sold our previous primary residence in 2021 and need to wait until 2023 to qualify for the homeowner's exclusion again for tax purposes. My wife and I both work busy corporate jobs and are raising a young family, so our time/energy are limited. 

With that context, what would be our best option for our current home?

1. Sell today and take the tax hit because a 5% downturn in the market in the next year will be about the same as the tax hit.

2. Rent the home on a 1-year lease, not renew the tenant, and sell the vacated home next year (market rent is almost the same as our current PITI, so should be close to break even).

3. Find furniture to rent and a property manager to do a short-term rental (Airbnb/VRBO) for the next 10-12 months.

4. Find furniture to rent similar to #3 above, but use it as a corporate rental and/or market to traveling nurses.

5. ???... insert other suggestion here.

The home is in the San Gabriel Valley area of southern California and is not within walking distance of many amenities, but there is plenty within a 10-20 minute drive. 

Thank you!