All Forum Posts by: Tyler Petty

Quote from @David Sandvig:

I'd take the money and run!  I would make sure that you've lived there the past 24 months so you can avoid that gains tax though.  I'm not a CPA and this isn't advice, but qualifying for the Section 121 exclusion could keep you from paying Uncle Sam anything.  There is a phase out, so even if you've only lived there 20 months, you might qualify for a partial exclusion on those gains.  If you haven't lived there 24 months, I'd highly recommend you talk to an accountant and/or wait until you're at 24 months of living there to sell.

Great advice @David Sandvig! I’ve been here a little over two years now so will definitely benefit from those tax free gains!

Quote from @Jaron Walling:

@Tyler Petty Great decision to sell. Negative cash-flowing assets are bad ideas. Austin, TX is an outlier and what occurred in that market baffles other places. It's wise to take profit, rent, and assess future goals. Nothing wrong with it. It took risk to buy and hopefully it pays out. You'll be in a great position to buy again when the time and location makes since. 

Thanks Jaron! Yea that’s what I’m thinking as well - being in a better position to buy again in the future but in an area I’d actually like to live in long-term. I’m glad to have reinforcement here knowing I’m not being short-sighted by selling. 

I appreciate everyone’s feedback! I’ve decided to sell and had my realtor come out this morning to get the ball rolling. I’ll plan to rent for the year and then reassess options as ideally I’d like to leave Austin but the tech scene may keep me here. 

Quote from @Aaron Gordy:

Okay. I meant how much has rent increased in the submarket where your house is at over the same time frame? Curious. Its really a math problem.  I understand the desire to live downtown. Got it. Downtown is fun and cool. No doubt. I say that because I bought my first rental property with a va loan for 80k a couple of decades ago and sold it for many many multiples of the 80k later with a 1031 exchange. 

Ah my bad. I was quoted $2300 a year ago for my place so at least in the last year it hasn’t really changed. 

Quote from @Aaron Gordy:

That is an excellent return on investment! How much has rent increased over that time in that submarket? 

We found a new apartment complex downtown and for a 2bed 2.5bath 1200sqft it’ll be $4200. I’ve looked at tons and most seem to be around that price point if not significantly more. So, more than the mortgage for sure but like I mentioned we’re interested in trying out that city life. 

Quote from @Jordan Moorhead:

@Tyler Petty it sounds like you don't like your neighborhood, have lots of equity, wouldn't make money as a rental and won't pay taxes if you sell now. 

IMO I would sell and take up to $250k tax free from living in it 2 out of 5 years. Alternatively if your HOA allows it you could do a furnished monthly rental and make $4000-5000 a month, but you would need to pay $10-15k to furnish it nicely to get great results there. We do lots of those and have amazing results in Austin.

Do you have a good place to invest $150-200k?

Hey @Jordan Moorhead, thanks for replying! I think your assessment is spot on. In terms of investing that equity, I haven’t decided yet. I’ve considered stocks, starting a business opportunity on the side, or looking for some real estate investment perhaps. 

The furnished rental does sound interesting and no one I’ve spoken with has even suggested that as an option. I could afford to do that if it’s a viable option. 

Mind if I shoot you an email to discuss about that more?

Quote from @Jeff Schemmel:

@Jordan Moorhead has a solid grip on the Austin Market and can give you the pros/cons of this decision.

 Hey, thanks Jeff!

Hey all, 

Long story short, I'm interested to hear opinions from experienced folks on whether I should sell or rent my Austin, TX property. 

I bought my house (3bd, 2b, 1800sq ft, built-in 2018) in 2020 for $315k (VA loan, no money down) and today, it is appraised at $505k. So I've got ~$150-200k in equity. It's in the South-East part of town, south of the river, and ~10-15min from downtown Austin, 78744. I've spoken to realtors and property management companies, and they've informed me my house could rent at $2300 (mortgage is now $2306 due to a $300/month YOY property tax increase) or sell between $485k - $515k. Property management and their fees run me $4484/year. After these fees and mortgage and adding the rental income, I lose (-)$380/month or (-)$4556/year. I make good money working in tech, so could eat these costs, but I'm unsure if this is the best idea to rent it. It's speculation to assume my house will be worth millions one day because of Austin, but it's plausible to assume it will continue to appreciate nicely. However, property taxes also increased 70% this year, and continuing increases will be a further loss.

If you're interested in my rationale behind this, feel free to keep reading.

My girlfriend and I are planning to move into an apartment in downtown Austin. Honestly, we hate being homeowners, feel stuck, we're surrounded by families in the suburbs (we don't want kids), and also are not crazy about Austin. However, it's a good place to work in tech, and until she can work remotely as well (~1-2 years to go) we'll have to stay here. Downtown is like our last-ditch effort to give Austin a chance. I'd consider buying a condo downtown, but most are going to be ~$700k + for a nicer two-bedroom. I know most will say renting is a waste of money and rents will only increase, but at this point in our lives (early 30s) we want flexibility and experiences. The downtown apartment provides that plus all the amenities (gym, pool, etc.) and if we end up continuing to hate Austin, it'll be easier to move out of state vs trying to sell a house.