Should I sell my rental or keep it? - Posted by June

Posted by Rick-in-Cali on August 04, 2007 at 19:24:50:

Capital gains exclusion is $250,000 for a single person living in their residence for 2 out of the last 5 years, and $500,000 for a married couple.

Should I sell my rental or keep it? - Posted by June

Posted by June on July 29, 2007 at 07:18:23:

I recently moved into a SFH after living in my my Tri-plex rental unit for 3.5 years. I originally bought the rental for 200K in “03” with a 6.50% fixed rate. I did a cash-out re-fi @ 6.17% fixed last year for 250K. The rentals like mine in the area sold between 290K - 300K as late as September last year. Based on the recent news about real estate dropping and probally dropping further in the future sould I sell and take the 40% ROI or ride it out and possibly lose?
My current story with the rental:
$2100.00 mortgage/taxes/insurance/water/maintence a month. Tenants pay for their own heat and hot water. I receive $2400.00 in rental payments from the tenants. Living me with $300 a month to put in my pocket.

Re: Should I sell my rental or keep it? - Posted by Tim

Posted by Tim on July 30, 2007 at 12:53:43:

If you sold it now then I think that since it was your primary residence for over 2 years that you would not have any capital gains tax if your gain is under 500K. There is a time limit though as to how long you have moved out of it where you will not qualify for the tax break so I would check that out.

Tim

Re: Should I sell my rental or keep it? - Posted by Jason

Posted by Jason on July 29, 2007 at 19:16:32:

Good question. I think you should hang on to it, the tenants are paying down your mortgage each month right? and you are recieving a decent positive cash flow and have a good interest rate. If the market drops even futhur I believe you will still come out on top because the tenants will have paid down your mortgage.

It is a good idea to check what’s going on in the area where your property is located as well. If the neighborhood is going down, I would probably just sell and reinvest the funds in another area.