Moving to TN when you have rentals in WA

Moving to TN when you have rentals in WA

Rental Property Investor · Seattle, WA · Member since 2014 · 1k+ posts · 1k+ votes

I have a portfolio of rentals I could retire off. I would be retiring from my professional career, but want to move out of WA to a place like TN. Therein lies the problem. I'm burned out and would LIKE to retire next year at 40 years old, but I'm faced with a choice: sell and 1031 exchange the rentals to TN rentals which would require me to keep working for a while longer, maybe 2 to 3 years (they are mortgaged, some are recent purchases, others I refinanced recently so I need to let them fatten up before selling due to transaction costs, plus I expect to try TN for a year first to make sure I like it before selling my rentals in WA and moving them to TN. As such, I need to keep W2 income for a while or go with non traditional lenders). 

This plan would require me to keep working since my rentals are mortgaged for tax advantages and I need W2 income in MOST cases unless going with non traditional lenders for loans when I 1031 exchange into new rentals from WA to TN (you have to replace the debt, but if you have no debt you can just buy cash with no loans).With occupied rentals, there is minimal management required, so it won't be an issue for a year or so of trying out TN to have my rentals here still. Property management is overpriced and eats into a significant amount of cash flow for little work.

So I'm wondering, are there other options?

-Do I just leave the rentals in this high appreciation market and fly back and forth when I have vacancy, live out of the vacant rental until I can rent it out again?

-Do I pay off the rentals, take lesser ROI/appreciation but higher cash flow and enjoy greater financial security but at the expense of more exposure to lawsuits?-Do I just move to Idaho instead which is within driving distance (day trip) for managing the rentals?

-Do I just pay some friend or contractor (not a property manager, too expensive for the little work they do) when I need someone to go do something on a rental?

Right now 99% of the time I hire a contractor to do work on rentals. When the unit is occupied, I can just have the tenant let them in. But when there is turnover and repairs are needed, I'm currently required to go and deal with the access, bidding, and oversight of the work. I have a friend here I could pay to do this work for the time being, but he is not so on the ball as far as managing things (his life is a bit of a mess) but he is available to do it.

Are there options I'm not considering?

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  • Eric GiovannucciBusiness Member
    Investor · Boise, ID · Member since 2014 · 172 posts · 99 votes
    5y

    @Jack B.

    I’d advocate for a solid property manager and move wherever you want.

    But sounds like you want/need to be heavily involved. Could always 1031 everything down here into the treasure valley in Idaho and move along with it.

  • Rental Property Investor · Seattle, WA · Member since 2014 · 1k+ posts · 1k+ votes
    5y
    Originally posted by @Eric Giovannucci:

    @Jack B.

    I’d advocate for a solid property manager and move wherever you want.

    But sounds like you want/need to be heavily involved. Could always 1031 everything down here into the treasure valley in Idaho and move along with it.

     I already noted I don't want to use a traditional PM because of the costs. I'd pay almost 60K a year for something that requires about 20 hours of work per year that I do myself. That's insanity.

  • Rental Property Investor · Seattle, WA · Member since 2014 · 1k+ posts · 1k+ votes
    5y

    One other thing I had considered and talked to one of my contractors about is paying him a monthly stipend to deal with the rentals for me when there is an issue. He was very interested, but after a few jobs he became unreliable as he had too many remodels going on and they got priority.

  • Eric GiovannucciBusiness Member
    Investor · Boise, ID · Member since 2014 · 172 posts · 99 votes
    5y

    @Jack B.

    Totally understand why you don’t want to use a PM, we differ in our opinion there but I do absolutely get why you would not want to.

    That is why I suggested 1031 into the Boise/Idaho area that you had mentioned in your post. Allows you to move there as you had mentioned and move into probably one of the hottest markets Ytd.

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