sell my house or rent it out

[bullfrog]

I had a bad experience renting. They did so much damage that the insurance didn't want to pay long, long story. Ended up loosing more when I did sell. The next house I basically flipped over a 15 year period, long, long story. Sold after 3 weeks on the market a few months before the housing bubble burst. Made enough to buy my retirement with pension and hit the road. So luck and fate has more to do with it in my life than planning I guess! Every one that I know that was successful renting stayed close to their properties and did their own maintenance, basically a full time job, using the monthly rent to buy more houses to rent. After several years they usually maxed out at about ten properties and sold out for a lump sum to retire on because they were all worked out.

 

[RoamerRV428]

It is ALL about you and what YOU require. Thing is hubby and I are the type that can sell it all immediately and leave it all behind. We don't want or need a safety net when 'walking away' from this lifestyle AND when we sell the home that money is going into a money market account and just sit there, as our safety net for the next possible home we want to buy if required for any reason, thru health issues that take us off the road or a new location we find and love and want to buy another home.

Thing is you want to rent to have income. If that is super important to you then you find a good management company in your area and be sure to understand everything it entails from their service and the exact amount of cash you will be receiving monthly/quarterly etc. on how it is paid out to you and be sure you understand that enough is being held back to cover taxes and repair fund and more. It is all about researching the management company you choose in your area and their service contract.

My MIL had 11 rentals. OMG. She finally sold it all off and she said it was the one thing she would never do in her lifetime over again Hubby has helped her with them thru the years and he said flat out he will never be a landlord seeing how much money his mom has lost and what was required from crappy tenants. She never had a management company handle her business but she had friends who did use them and said they were favorable to trying to do it all on their own. A service worth paying for but not all inclusive also, some companies charge 'extra' for evicting process and more so it again becomes imperative to know what is included and not included in your contract and what requires 'extra' fees which could add up horribly. But I do believe it is researching and knowing about that local company and your financial contract that is absolute key.

But if you must have an income from this to make it out there on the road then it is imperative you start asking around your local area for the best local management company. Start finding out all the info you need now for when you are ready to put your plan into action.

best of luck finding out the right path for you to move forward!

 

[mpruet]

Since you are keeping it for at least three more years, you don’t have to make an immediate decision.  Myself - I’d be tempted to hold onto it for at least two years after then - assuming that you do become nomadic.  That way you have somthing to fall back on in the event that you decide you no longer want to travel.  Only then would I consider selling. 

I personally would want to sell it because I wouldn’t want to have to worry about upkeep.  Yes there would be an issue of long-term gains taxes, but that would be a fraction of the gains.  Also since you are approching retirement, there is a stragety that you can use to minimize one-time income such as taxes on capital gains from the sale of a house.  (There used to be a way to not pay Cap. Gains on the sail of a house.  It was a one-time shelter and I don’t know if it still exists with the new tax laws.). 

However, if you can build up a cash account and live solely on that cash account upon retirement, then you would have zero income for that year.  That would allow you to sale the house in that year and would only have an ‘income’ on the capital gains from the sale.  That should minimize the tax hit from the sale. That might enable you to move the physical asset of your house to a more liquid asset which might be easier to manage if you are on the road.

 

[B and C]

Please don't base selling (or not) your house on tax advice given here. Get a professional opinion.

In that vein, renting out a house and then selling it would incur capital gains. Renting a house out and then moving back into it for two years, maybe not. Professional opinion needed (I am not).

An insurance policy you buy on your house to cover damage done by renters. The condition of the house would have to be inspected before such a policy could be written (I assume, not an expert). Only from reputable insurance company, not the cheapest quote.

This would give you a place you know to come back to.

Now, if this house is in a location you really don't want to come back too, why hang onto it? The only reason would be to rent it out for the small income and then sell if/when you want S&B again or stay there for the two years if capital gains tax would be a big burden.

Starting to ramble and this old brain is starting to hurt. Make the decision that is right for you as you see it. Can't unmake the decision to sell once it's sold.

Tough decisions.

 

[mpruet]

I should mention that since you are nearing retirement I suspect that you are thinking a bit about how to manage your assets after you retire and are probably getting invitations to retirement asset seminars.  The stragety that I was describing is sometimes called the “bucket stragety” and is often used to minimize the impact of having to withdraw cash in a down market.  It is also used frequently to allow a retired person to continue adjusting their assets while minimizing their tax hit.  In my case I have used it to make partial distributions from my traditional-IRA into my Roth-IRA while minimizing my tax hit. My ‘cash’ bucket is comprised of tax-free bonds - which while don’t appreciate that much allows the remainder of my assets to be in more aggresive stuff. 

I fully agree that you should get some financial/retirement advice.  You might also want to search on “Bucket Strategy for retirement” in google.  There are quite a few articles in Vanguard on the topic as well.

I guess what I’m trying to get at is that I doubt that the gains tax should be a reason to prevent you from selling if that is what you want to do.

 

[phyllisindallas]

Thanks all for the great input.

The more I think about it, the more I think I will likely sell the house. While I am terribly grateful to have this house with no mortgage, it feels like a weight around my neck, and it is scary thinking about relying on a management company to handle it, since I took care of it before when I rented it. Also, I had similar awful renters in the past as some of y'all have had. My property taxes have been going up also.

I think what I should do now is find a good accountant to give me some professional advice on how to manage my future. I honestly hate to do that since I like taking care of whatever I can myself, but these are big decisions I'm looking at now which will affect the rest of my life.

I think I'm in a better situation than I was originally thinking if I sell my house. Even if I spent every dollar of the sale before retirement age (which I can't see even being a remote possibility- it would be more spending than I am doing now in a house), I will have enough to live on at retirement with my pension and ss.

Once I actually thought about selling this house, I felt a huge weight lift off my shoulders. I actually feel lighter now. I am so tired of yard work, house maintenance, cleaning, taxes, etc. Also I can't even leave now for more than a few days because of fear of a break in, that it is sometimes like a prison to me.

I am so excited! I'm going to start looking at cargo trailers next week and plan on buying one in the next year so I can take my time fixing it up (plus I'm so excited about ditching this house and leaving that it will be fun to work on it).

Thank you again to everyone who took the time to read and respond to my post. Hugs around the room!

 

[Ella1]

Hi, I tried to pm you, your pm is "off".

 

[TexasWoman]

Hi, I tried to pm you, your pm is "off".

Looks like she deleted her account.

A real estate loan officer told me recently that if one is going to ever sell their house, now is the time.
A real estate agent yesterday told me he thinks we are at the top of the market.
CPA said there are no taxes on the sale of a primary house lived in continuously for 2 years out of 5. Check with your CPA on this.

The clock is ticking...

 

[cyndi]

Phyllis asked to have her account deleted. I'm going to close this thread to avoid further confusion.