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Updated about 3 years ago on . Most recent reply

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Ted Esposito
  • Rental Property Investor
  • Tampa, FL
0
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6
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Tenants moved out. What should I do with the property?

Ted Esposito
  • Rental Property Investor
  • Tampa, FL
Posted

This was my first home (3/2 SFH) which I purchased in 2016, lived in as my primary through 2019, and then turned into my first rental property (I bought another house to move into). Mortgage is $1300 and income was $1800. Currently sitting empty. The local market (Florida) is going through a big housing bull market (and higher than average inflation at 8.5%). A lot of people are moving from California, the midwest, and northeast. There are a ton of investor rehabs, flips, and rentals (25% of buyers here are investors, many out of state).

I purchased the house for $189k at 3.875%, still owe $154k and could sell as-is for $325k. If I sell before 2023, I could avoid capital gains tax because I lived in for 2 of the last 5 years. The condition is okay, the bathrooms and kitchen are outdated from the 60's and the roof is approaching the end of its life. So here are my options:

OPTIONS TO SELL

  1. Sell as-is, as soon as possible ($300k-$325k)
  2. Remodel the kitchen and bathrooms (~$20k?) and then sell ($325k-$375k)
  3. HELOC and use it for #2
  4. With either option, I could walk with no cap gains tax, or attempt a 1031

*If I sell, I'd walk with maybe $150k to put towards another property.

OPTIONS TO RENT

  1. Rent as-is, as soon as possible ($2000/mo)
  2. Remodel the kitchen and bathrooms (~$20k?) and then rent ($2300/mo)
  3. Cash-out refinance and use this for #2 and have another $80k for another property
  4. With either option, I'd be losing the opportunity to sell with no capital gains tax if I continue renting it in 2023.

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