Sell? Rent? Develop? Near Asheville, NC.

[Rod Israel]

New member background:  I have been reading the forums here Since last fall (2018), and enjoy hearing the highs, lows and knowledge exchanged here.  My wife and I have a rental in Montana, and we are looking at one around Kansas City, but we aren't really investors.  We look at these houses more as annuities than as traditional investments. Buying for cash and letting it come back to us as a monthly payment rather than getting $0.75% with it sitting in the bank.  

We are more or less retired, meaning we have some cash and investments, but we haven't really found any work having returned from working overseas in 2017.  Our job skills became dinosaurs while we were living abroad for 10 years.

What has happened:  My mother is in her 90's and in increasingly poor health.  Until recently she has been living at home with day and night helpers taking care of her, but she has taken a turn for the worse and the doctors are saying there is no way she can return home now.  Unstable and a bit fragile, plus no one that works with her is strong enough to get up if she falls, which has been going on at a regular basis.  Only a matter of time before she seriously injures herself. Other issues, but this is a big one.

I never thought I would be writing any group for advice, but I figure I would be an idiot, having such a resource and not using it, and I try to avoid being an idiot.  I don't know anyone, or think in real estate circles, so I hope you can help analyze this situation.

My brother and I are executors of the family trust, and it includes her house and investments.  My father died in 2016, and since then her investments have been covering the bills to be at home, but the situation has changed, or is changing.  Sorry, I have been going on about this.

I guess the upshot is my brother and I are trying to figure out what to do, hopefully to make a decision within the next 30 days.  

Should we rent out the house?  It keeps someone in the house, and gives some income that will help pay for her care in a nursing home.  At the moment the a local realtor has told my brother the rent should be between $1500 and $2000 a month.  Property taxes are about $3,200 and insurance is about $1,300 a year.  The house was built in 2000, so not much maintenance has been needed up to this point.  Repaired the heat pump in 2017, and a burst pipe in the drive in basement which was no big deal.  

Should we sell the house?  The house is on 20 acres and close to the city limits of Asheville.  I don't live near my mom and my brother, so my only resources at the moment are through websites; Redfin, Realtor and the like.  Zillow gives an estimate of $585K as a value.  Does Zillow give a reliable estimate of property values?  The upside is we don't have to do any repairs and such if they do start turning up, The money is there for my mother's care, and we don't have to start cashing out her other investments and paying penalties to do so.  Also, there is someone in the house to avoid vandalism or squatters. and it quits being our problem at all.

It occurred to me this afternoon that she might have to pay capital gains on the sale if we do that, but I don't know if the 2 out of 5 years rule is still in force, which would let her mostly off the hook.  

If it comes to capital gains it is going to be ugly.  The property was bought in the 80's and wasn't expensive at that time, and they had the house built, which also was not expensive, but it is a very nice house, about 2,000 square feet 3 bedroom, two bath home with a walk-up attic, attached two car garage, drive in full basement/garage and property with woods and a good 40x60 solid detached barn/shop with a concrete floor.

I know it is a little outside to purview of this forum, but I am grasping around at straws. I hope someone has ideas, and I am sure I am not the first one here to have to make these kind of difficult decisions.  Some advice would be nice.

Thanks,

Rod