All Forum Posts by: Nabeel Qureshi

@Dinh Gia Phung

I’d be very careful about “wanting to rent to a family”. That’s a clear violation of fair housing act based on “familial status”. You can’t discriminate for or against someone because they are/aren’t matter and/or do/don’t have kids

Congrats! How did you pay it off so quickly? Agree if you own it out right it will cash flow but then more equity is tied up in property?

I would recommend looking for a condo or townhome under 400K and living there for a year or two as a primary residence.  You might be able to get it cash flow after renting it out because of better interest rate than investment.   

Those rentals are harder to rent, you’re right because the rent is higher and less people in the market for those.  Plus side is you might attract a small family of reliable tenants if your place is nice.  And the appreciation will be better.  3 bed 2-3 bath homes will always be appealing to first time home buyers in future.  

Also consider 25% on a lower price property to help cash flow.   Real estate is location location location.  Recommend staying in Arlington, Alexandria, or Falls Church- Woodbridge and Manassas may be too far out.  Think of something close to schools, major hospitals, DC, govt etc.  

Thanks @Luciano A. that is helpful. Yes, had realtor comp/analyses for both selling & renting. 

Not looking at 1031, thinking for tax free gains since this was primary residence. It's Washington DC area so relatively insulated from market corrections, though if the sky truly falls and it happens to be right then, no real estate will be unaffected.

I am not motivated to rent by greed, I am motivated by interest - have never done it before, and given that this property I already own and other factors make it conducive to renting- will certainly look at new opportunities in next market as well. 

@Nathan Gesner @Theresa Harris I have already made the decision to rent it out, what I am asking is should I sell it in 2024, before I get to the 5 year ownership mark to take advantage of the tax free profit per IRS Publication 523, or should I hang on to it Long term?

@Nathan G.

I have run the numbers. It cash flows positively.

Operationally, What makes it most attractive is that because it’s a condo building- the building has their own management and maintenance staff and association rules.

The interest rate is also great

They mention my *exact* situation as an example in the publication 

Yes you absolutely can.  See IRS publication 523

Why not rent it out for a bit and gain more equity and then take the tax free gain? 

My wife and I have lived in our condo for 17 months. We are moving across the country for a new job, and are converting the condo to a rental.  We don't intend to ever move back into it.

From a tax advantage and overall investment perspective, would it be better to: 

A) Hang on to the condo long term if it's doing well, and when needed do a 1031 exchange

B) Sell within 5 years - as I understand it, the 2 year/5 year tax rule for us would be 17/24 months x $500, 000 = 354166.67 of profits tax free advantage.  As I read IRS Publication 523 , I believe we qualify for a partial exclusion (not the full $500, 000 of tax exempt but at least for the time we were in the property): Work-Related Move You meet the requirements for a partial exclusion if any of the following events occurred during your time of owner- ship and residence in the home. You took or were transferred to a new job in a work lo- cation at least 50 miles farther from the home than your old work location. For example, your old work lo- cation was 15 miles from the home and your new work location is 65 miles from the home.