Sell or rent our current home ?

Question

Wife and I are looking to sell where we are and more to a nicer area closer to the shore.

We own our home 100%, could get 500-600 for it and are looking at homes in the 700-800k  range. The home has a separate studio for the in ground pool area. We could rent the home, but it’s too nice and we’re afraid the pool is a risk to liability.

Another thought is for us to finance the sale, offering a more competitive rate, and apply that payment to finance the mortgage of the new home.

We’re in a good debt place, and have maybe $200k cash for a considerable down payment.

I’d be interested to hear what ya’ll might do in our situation.

Thanks!

Mohammed Rahman · Answer

Hey @Joshua Dolan - good problem to have right now!

If you're not in any kind of a deadline to move, then you can consider all your options. I don't think there's any "right" time to be frank.

With rates rising, you'll have a bit of a harder time finding a strong buyer for your home... but you'll have an easier time being a buyer since you'd be classified as an A+ buyer tier (mostly cash purchase).

Alternatively, you could wait until rates cool down so you get top dollar for your home... but then when you're house hunting you're going to face more competition, even as an A+ buyer.

Khari F. · Answer

Hi yes was wondering if cap gains tax was a concern for you if you decide to hold and move out. my understanding is exemption requires primary residence 2 years out last five years

Khari F. · Answer

After cap gains tax?

William Sing · Answer

Hey Joshua, congrats in being in such a great position. I think this depends on what your long-term goals are. Not sure if you are wanting to continue investing or do a 1031 exchange or something else?

If you turned it into a rental, I'd talk to your insurance company and a lawyer to see how to best mitigate your risk. When you have nicer houses you usually have nicer tenants and just make sure to have good pre-screening.