250k tax benefit to upgrade new house or just buy another house.

[Vu Truong]

Hi everyone, 

I just married last year. Both of us have our own mortgage for more than 2 years. We are looking for a bigger place to live. One of the place will be for my parents . Shall we rent out the other or sell it and get 250k tax credit and upgrade bigger &nice house? 
How do you guys do when scaling more property? 

[Jake Wiley]

I assume you are meaning the $250k gain is tax-exempt because it is your primary residence, thus the reference to the two years.   

Assuming you also have two homes that you are looking to potentially sell as you are looking for a new home for your new family and then you will have money leftover to potentially invest in a rental property.   

I'm a big believer in the property ladder and moving on every two years if it makes sense to take advantage of the tax exemption.    However, we always buy fixer-uppers and thus are able to create equity in our new property, which makes it work.   If you haven't maxed out the potential exemption and are moving into another house assuming appreciation, will continue then there is no real benefit there until you hit the cap on the exemption.   

The other piece of advice I would give you for scale is don't overdo your personal residence, do you really need a bunch of space?   Do you really have to live on a particular street.    The ability to scale is tied a great deal to your available cash and ability to acquire property and keeping your personal expenses as low as possible will help in this regard.   

Good luck!