Live in rehab turning into rental. Advice on moving forward

[Bryan Stocklas]

I am currently living in my first house and in the middle of doing a rehab on the property to turn into a long term rental. I live near the Jersey shore in ocean county and was thinking about my next move. I was thinking about going in land a little more but was worried about buying a rental in a more rural area. Was wondering everyone’s thoughts about buying where there is less people/jobs, but since I could get a property for less and save on taxes would that balance out the risk? Has anyone found it any harder to keep/find tenants in a more rural area or does it usually balance itself out in the long run?

[Mike Dymski]

Be sure to look into the section 121 gain exclusion on the sale of a primary residence if your property has appreciated and/or will appreciate with the rehab.  Losing that tax benefit can be a big deal if you hold the property as a rental for three years without selling it.