Rent or Sell Lower East Side NYC Apartment

[Jon G.]

Hello,

I am a doctor with about 300,000 in medical school debt. Earnings next year will 250, then 330K.

About 100,000 of my debt is 5-6.8%, the other 200,000 is 2.8%-3.8%.

We are moving back to the NYC area and were wondering if we should sell our current Manhattan apartment (we won't be living in Manhattan) and use that money to pay off my higher interest loans and credit card debt and put a down payment on a house versus hold onto the apartment and continue to sublet (rent) it out in the hopes that someday we can sell it for a lot of money or keep it in the family. Its currently worth about 700,000 and a house would run us about 1 - 1.5 million (will likely take out a mortgage)

What are your thoughts on keeping money in the NYC apartment vs liquidating it to pay off debt and invest in a home we will actually live in.

And if we do sell - how can we avoid the 40K in taxes we will pay?

[Joe Fairless]

@Jon G.if you can make money at a higher rate than the interest you're paying on your loans then I would invest the money and pay down the loans over time. If you can't then I would pay down now.