All Forum Posts by: Alec Norman

We vacation in Corolla a lot. It's probably our favorite part of OBX and I bet homes purchased awhile back do fairly well because of how popular it is. Prices have significantly increased everywhere though so it's probably harder to make numbers work now. We have family members who have owned rentals in other sections of OBX and it's not easy having positive ROI on beach houses with how high all the expenses are.

I think global warming is a bigger issue for OBX and any other barrier island though. I think Hatteras Island will be uninhabitable eventually and the mainland of OBX isn't going to fare well either. They were at least attempting to build that big bridge directly into Corolla so at least the local jurisdictions believed there was a future there, but it looks unlikely to ever get built.

Sounds like he already has the roommates lined up for Sept 2022(he mentions co-workers). I'm curious about why Plano as well. Work relocation? Are you familiar with that market?

Insurance is to protect you from things that you can't cover yourself out of pocket. Catastrophic damage to a home is one of those for most people. Extended warranties on electronics...pass

I don't understand why discussions like this always elicit so many 'nonsense, the market is booming right now!' posts. That's the point, you have to get out ahead of things like this. If you wait until the stock market bombs to decide to stop buying stocks it's too late. I don't know how you can look at climate change and ascertain it's a myth and nothing is going to happen. You can argue how much humans are responsible but I don't know how you argue sea levels aren't rising. 

We always wanted a beach house in Outer Banks, NC but the more I read about climate change the less I want to own anything there, or on any other barrier island. Maybe some beaches are more protected from it. It's certainly something to think about though.

I'm blown away by how many insightful responses I've gotten. Some really great info for me to consider. I really appreciate all the responses.

@Dawn Brenengen yes we could still sell within 3 years of moving out and converting to a rental and still get the full cap gains exemption. I've thought about that possibility too, giving it a trial period for a year or two and then seeing if I want to keep it as a rental long term. 

@Russell Brazil We'd probably clear a little over 100k from selling after closing costs. The townhouse is in Vienna, a few miles from Tysons Corner and a little over a mile from a metro stop. I believe it to be a great location which is part of the reason I want to hold it even though I know it won't generate much positive cash for awhile.

@Lynn McGeein Thanks for sharing your experience. The headache of being a landlord is a little scary. Seems like it could go either way based on what tenant we get.

Thanks for the responses!

@Sam Lin the house hacking is a good idea, however I think it's off the table for us. The wife isn't interested and we probably will need all the space in the SFH with 3 kids.

@Dawn Brenengen I think about $600 a month goes to principle.

@Gabriel G. I don't think I'd need to 1031. We're eligible for the full cap gains exemption so we can easily sell and cash out. There won't be any big HOA assessments, the HOA basically just covers trash and landscaping. Good point about the market dropping though. We could sell for a good price right now, could be a good time to just sell it and deinvest although most of the equity would probably just go into the SFH in that case. I think there is opportunity for lots of appreciation though, even if we hit a short term drop. Our location is a few miles from Tysons Corner which is prime real estate and is gong through some huge redevelopment.

I'll check out the rental calculator but it sounds like maybe we shouldn't bother renting. One issue with selling it and trying to find a better rental property is we'll get hit with significant transaction costs from selling the TH and buying another rental. That would eat up a lot of the equity we had to reinvest. I appreciate the responses.

So I've been kicking around the idea for awhile of keeping our townhouse and renting it out when we eventually buy a SFH in a year or two. I just don't know if it's a wise decision. I feel like part of the reason is sentimental, we've lived here for 5 years and I've become a little attached. But I do think it would be a nice rental property, in a prime location in Northern Virginia(right outside DC). It would cash flow barely (2500-2600 rental income vs 2400 in mortgage/hoa) but should improve over time. We might have to eat some maintenance costs early on. I'm a CPA so I understand the tax implications, particularly capital gains. I either want to sell the place and get the full exemption or hold it long term as a rental.

Anyone else deal with a similar situation? Selling the place seems like the easiest thing to do but I feel like if we can hold onto the property we'll thank ourselves 20 years from now, even though it could be harder in the near term. Or maybe it will end up being a huge drain on our resources and we'll regret it.