All Forum Posts by: Kelly Williams

Well that may change everything. @Steven Hamilton II thanks again for your help. The numbers you used as an example earlier are actually pretty accurate. I will have lived in the house for three years before I move out. So, if I were to rent it for three more to use the 5 yr rule I would still have to pay capital gains tax on 50% of the gains.

I will take that into account. I guess I have some calculations to do. The house will cash flow about $500 per month. I just refinanced this summer so my payments will not begin to make much of an impact on the principal for a few years. The house is in a great part of the city that is currently going through major gentrification. Scrapes and remodels are popping up on my street every day. The property has already appreciated 20% in 2 years. I think there is still plenty of room for more growth. This has been my reasoning for wanting to hold onto it. @Wayne Brooks buying a similar property with similar appreciation would be very difficult to find. not to mention my loan on this property is at 3.5%. thanks again for everyones help.

@Steven Hamilton II , I cant find in the tax code where this is the case. As far as I can tell if the property is your primary residence, any 24 months of the last 5 years you pay zero capital gains tax. I am definitely not the expert here, but can you show me how this is the case? Thanks again for the input.

@Steven Hamilton II , I don't understand. What do you mean by allocate the gain to the rental years? Please explain. Thanks.

That is what I was thinking. I guess it is just the unknown value of appreciation that I am concerned with. I was hoping for a calculation i guess. Something like value must appreciate by x amount. It will probably be a much easier decision in 2.5 years when I have a better idea of the amount of appreciation the home has gained. For what ever reason, I just realized last night about the 5 yr rule with no capital gains. It kind of put a kink in my 5 year plan of renting the home. thanks again for all of the quick responses.

Wow, thanks for all of the quick responses. Great conversation here. So the property will cash flow pretty well. The appreciation factor is my main reason for not selling when I move. It seem to me that there would be a rule of thumb, to figure if a sale would benifit before the 3 years. Similar to the rule of needing to own a primary residence for 3 years to make it profitble?

I am moving out of my current residence and plan on turning it into a rental. From what I can tell if I sell the house within 3 years after moving out, I will not have to pay capital gains tax. The rule is if you lived in the house 2 out of the last 5 years then no capital gains tax is needed, if the gains are under $500,00 which mine will be. So my question is, when does it make sense to keep the property as a rental longer than 3 years? I do not foresee keeping the property as a rental for more than 10 years, probably less. Any input?

Thanks for all of the input.

I am looking for resources with detailed numbers for a rental property. I plan on turning my current home into a rental property in about 1 year. I understand the 50% rule and the numbers as of now are looking good. A few numbers I am unsure of are 1. How can I estimate the cost of preparation and repairs for a new tenet to move in? 2. How much cash should I have in reserves in preparation for maintenance. The rental income will build up quick, but how should I prepare for the first 6 months or so? Thanks.

Bill, I am definitely interested. What do you have in mind?

Thanks fork the response William. I am looking for a PM to manage a single family home in the Lohi area. As far as what I am looking for, I want someone reputable with a good track record. I will be moving out of state and will be renting my current home. This will be my first rental property so I am honestly not sure exactly what I need.