Losing homestead exemption to rent

[Eric W.]

Curious what Texas landlords feel about this or how they calculate it into their decisions. The homestead exemption is a huge help in lowering your tax bill. I have been considering renting my hours out and moving but between needing property management and losing the homestead exemption I’m starting to think it begins to eat into my profits too much and then I start thinking maybe it’s better to sell. I have a 2.3% rate and 1935 payment including T/I. I think I could rent it for 3700-3900. Just trying to determine if this is a good idea to turn into a rental so I don’t lose the low rate or if it’s better to take the equity and tax break. 

[Greg H.]

@Patricia Steiner That is not the case in Texas. Once the Homestead exemption is removed so is the 10% annual cap on increased Valuation. The property can easily be reset to make value the following year 

@Eric W.  None of us are familiar with your financial situation. First I would calculate what the property taxes would be at market value. Then you need to ask yourself if you feel comfortable with a $2000 plus expense if/when the property is vacant?. Do you have your reserve for major repairs ?  Once you aware those questions you will have a clearer picture and can weigh the pros and cons of renting versus selling and taking the tax free profit if you have lived there for more that 2 years out of 5