Sell off rentals? Or keep…in Illinois

[Heather Rodden]

Illinois just continues to seem to be a sinking hole. I own 4 single family properties in central Illinois. With the real estate market in such a good position I’m considering selling off our rentals. Anyone else doing the same? Or should I hold them. I was considering selling and looking for short term rentals out of state, or go to a multi-plex instead of multiple rentals.

[Bill B.]

If you don’t do a 1031 exchange when you sell I assume you are getting out of real estate for good. There’s almost no chance you could/should sell your current properties pay 10% in closing costs, 15% cap gains tax, 25% recapture tax, and then buy again in this market. 

I don’t know Illinois from a hole in the head, but if you don’t know any other markets from a hole in the head. I don’t see randomly (or at a stranger’s suggestion) picking another state to invest in.  Is their another nearby neighborhood you think is better that you could exchange in to? Do you other investments of high interest debts you could pay off?

Good luck with whatever you choose.