Sell or Lease? HELOC available, but GREAT SELLERS MARKET

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Sell or Lease? HELOC available, but GREAT SELLERS MARKET

Tiffany Koffel
Real Estate Broker · Wills Point, TX · Member since 2019 · 9 posts · 1 vote

I recently got married and we are moving into his home, so that leaves my home to figure out what to do with....  

I purchased my home and have operated it as a luxury house hack. The main home is a 100 year old home that I have completely remodeled.  I live in the main home and have a separate 2 BD 1 BA pool house that I rent on Airbnb.  We are in a small town and have a famous flea market so it rents regularly every month, but not all the time.  More like 1 weekend per month and summer months expand to 2-3 weekends per month because we are within a few minutes of a large lake.


I'm a broker so I know that the market is crazy amazing right now and could list my home for approximately $500,000. and could net more than $350,000. on the sell.  However, I'm not sure if that is the best route.  I have considered leasing both homes separately like a duplex and allow both tenants to use the pool as a shared common area.  I would continue to cover the expense of the pool cleaning service to protect my asset as my pool was just remodeled in 2019.  I would potentially rent the property for $2,500. main home and $1,250. pool house.  Here's one more issue to overcome, both homes are on 1 electric and 1 water meter.  

My payment is under $1,800. PITI

I also have access to a HELOC on this property...available $70,000. Owe $10,000.

Would you sell and reinvest in other real estate or keep and lease???

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  • Steve Vaughan
    Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
    5y
    Originally posted by @Tiffany Koffel:

    I recently got married and we are moving into his home, so that leaves my home to figure out what to do with....  

    I purchased my home and have operated it as a luxury house hack. The main home is a 100 year old home that I have completely remodeled.  I live in the main home and have a separate 2 BD 1 BA pool house that I rent on Airbnb.  We are in a small town and have a famous flea market so it rents regularly every month, but not all the time.  More like 1 weekend per month and summer months expand to 2-3 weekends per month because we are within a few minutes of a large lake.


    I'm a broker so I know that the market is crazy amazing right now and could list my home for approximately $500,000. and could net more than $350,000. on the sell.  However, I'm not sure if that is the best route.  I have considered leasing both homes separately like a duplex and allow both tenants to use the pool as a shared common area.  I would continue to cover the expense of the pool cleaning service to protect my asset as my pool was just remodeled in 2019.  I would potentially rent the property for $2,500. main home and $1,250. pool house.  Here's one more issue to overcome, both homes are on 1 electric and 1 water meter.  

    My payment is under $1,800. PITI

    I also have access to a HELOC on this property...available $70,000. Owe $10,000.

    Would you sell and reinvest in other real estate or keep and lease???

    Congrats on your recent wedding!

    As a long-time LTR landlord, I'd rent them out long-term, but only for a year or 2 to take advantage of the tax free gain. 

    it comes down to market timing ,  really.  I think the market has legs for another year in general.  If you start seeing DOM getting longer in your area, may be time to find a chair. 

    I'd rent out both for a year and see how it goes.  Charge extra to cover power  / utilities.  But I have screening processes down, leases, etc.  My decision may change if I didnt have those and needed a PM. 

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  • Matt Devincenzo
    Investor · Clairemont, CA · Member since 2011 · 3k+ posts · 2k+ votes
    5y

    With this scenario I think one of the biggest decision factors is, are you eligible for a sec 121 exclusion? If so that gain is largely or possibly even completely untaxed. If this was just a house hack duplex or another more standard investment property I'd probably plan to keep it. But since it is more of an odd property for a long term hold, my guess is you're better off selling and investing in something else instead. 

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  • Tiffany Koffel
    OP
    Real Estate Broker · Wills Point, TX · Member since 2019 · 9 posts · 1 vote
    5y

    I would be sec 121 excluded as this has been my main home and owner for many years. 

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