Sell Property Within 3 Years of Moving Out?

[Michael Barido]

I am coming up on 2 years since I moved out of one of my rentals. It is located in the Salt Lake City area (Kaysville to be precise). I have approximately $200k equity after buying it in 2/2018 and moving out in 7/2020. I cash flow $600/month which is really good. Should I sell within the 3 years to bank the $200k equity? It's a VA Loan so other than the funding fee and $15k flooring improvements and around $15k for something else (bad memory) I have nothing else in the house. Should I sell this year, next year, or wait for 5-10 years and pay capital gains taxes.

[Andy Jenkins]

Tim, if you've lived in a property as your primary residence for 2 of the previous 5 years, you can sell it without paying capital gains tax, Hence 2/5.

Michael, whether or not you sell is totally dependent on what you'd do with the money. As I'm sure you're aware, the SLC market is brutal for buyers right now, with very limited inventory and swarms of buyers for every property on the market. If your plan is to sell to buy more property, you probably won't find something that cash flows as well as your Kaysville place does. Personally I'd keep the house. That's from a Realtor who would love to see more inventory! If you're expecting a lot of cap ex (roof, furnace etc) to come up in the next couple of years, maybe sell in the spring when the market will probably go psycho again. Maybe. No, don't. Keep it. If you need the funds do a re-fi.