To rent or to sell my primary residence??

[Michael Dorosh]

Hello BP members,

I purchased an older property 2 years ago in Charlotte, NC for 145K as my primary residence with the intention of converting it into a rental property. I already put some money and sweat equity into the house, but it is going to need a new roof and electrical within the next 1-2 years. The house has appreciated with a FMV of approx. 175K. Should I sell now or make the repairs necessary to convert it to a rental property? If I do decide to convert it into a rental property, is it better from a tax perspective to make the repairs before or after I convert?

Thanks in advance,

Mike

[Sri Voodi]

Ok, let me tell you what I would do if I were in your shoes. 

Stay put for one more year

Rent it out 

Make the improvements

claim deductions while taxes as expense on income generating property

After 2 years if FMV is more than they are now and is to your liking, sell it. The profits are tax free on the sale of primary residence - that is if you have lived in the property for 3 years in the last 5 years.

If not keep renting it out.