Hello from Northern Michigan, Traverse City.

[Dan O'Neill]

Hi,

My wife and I got into real estate investing sort of by accident.  We were moving from Vermont back to Michigan for work and family and were unable to sell our condo.  After me staying behind for 3 months, we decided to just rent it out.  Well, it's been rented continuously for 5 years now with minimal issues!

Now we are looking to sell it and buy a multi-family closer to home, near Traverse City, MI.

We both have good full-time jobs and like where we live.  We'd like to use investing as a way to ensure we can stay here and don't have to chase the next good paying job to another region or state.  To meet that end, we've set a goal of having enough rental income in 5 years time to match half my wife's salary.

[Blair Knowles]

Hey @Dan O'Neill 

I am a real estate agent in Vermont and have sold many a condo in Winooski. 

A couple things to consider. ( Keeping in mind that I am neither an attorney nor a CPA ;-) 

Tax Items:

1) if you have not lived in the property 2 of the last 5 years you will pay capitol gains tax on the sale when you sell. Meaning, all profit that you make will be taxed. You can avoid this by doing a 1031 exchange. This way you can sell and use the proceeds tax free to purchase a multi family in Traverse. You have to buy within a certain time frame of your sale. 1 year? Check with an attorney. I have several in VT that I can recommend. You will need an attorney  to represent you in your sale, so it's good to have a few in mind and it would be good to use one that is well versed in 1031 exchanges. 

2) When you are an out of state seller Vermont will withhold 2.5% of your sales price at the time of closing. They do this as a buffer to check up on you and ensure that all of your property taxes, child support, etc have been paid in the state. You get the 2.5% back when you file your taxes the following year. It's not ideal and you CAN have this 2.5% withholding tax waived in advance by doing the "check up" up in advance. Speak with your attorney about this as well. 

Sale Items: 

1) Condo sales are the most difficult(or should we say the most annoying) , right up there with multi family sales, because VT requires the seller to do a Fire and Safety inspection at the time of sale (this is on top of the buyer's home inspection should they choose to do one-- which most buyers do). In fire safety inspections the Winooski Fire department is going to check things like the size of your egress windows, age of smoke detectors and fire extinguishers, GFCI outlets, closet light bulbs, dryer vent, etc. If they find anything that needs updating to meet their regulations you have to update it before you can sell. 

2) Check with your association to make sure you are accurately disclosing the association fee and any upcoming special assessments to potential buyers. 

I hope these ideas help!