[USER]

Would you keep or sell our house hack?
Explaining your reasoning with math is welcome.

*Please keep scrolling if you’re against being a landlord or conversely solely invest in real estate as I’m looking for neutral feedback*

-NYC metro area
-Cost of purchase plus reno: $550k (no mortgage)
-Property value as is: $1.2-1.3m

If we convert to condos and sell: $1.5-1.6m

-Current rent: $40k
-0% vacancy in 8 years of landlording. Have loved every tenant to date.

-Our FI Calc considers $95k annual gross spend which includes all housing / rental costs. We have $1.6m in additional investments outside of home value.

-Gross rent if we rent our unit too: $85k conservatively (we would likeky need $800k to buy a new place)

[Michelle]

Kind of confused. I’d not spend more $ to convert to condos and keep doing what you’re doing.

[Jamie]

This is a little confusing but that renovation doesn’t make sense to me if I’m understanding the post correctly.

That profit seems to be good assuming it is profit and not before expenses so continuing on is a good option.

Selling as is and investing it will get you almost to retirement.

I’d probably do the former given the capital gains taxes from the latter.

[Peter]

So, you purchased the house and renovated it years ago? And that’s what your current rent is?

How much would it cost to convert to condos? Is it currently a duplex?

Based off the very limited data provided, I’d guess you are charging significantly less than market rent.

Some local comparisons would be helpful.

If you sold and invested you could retire now. Nothing wrong with hanging into it and renting out what you are currently renting out either.

[Amanda]

Wait so you’re spending 95k annually on the building, and rental income is 40k annually (85k if you were to rent the unit you live in)?

Am I reading that correctly?

[Gina]

You may have already considered it, but I wonder if you have looked at the cost and time to convert to condo in NYC?

It can take $10,000 to 50,000 or more to convert a building into a condo. And it can take 4 to 6 months or longer to process the conversion.

I have seen a conversion take more than a year or more if that’s helpful information.

There are about 10 to 15 or more different kinds of fees that you’ll need to pay and depending on how many units are in the building will be part of what determines how long it will take.

If you’ve already factored in, it could be beneficial, depending on where the properties located and what kind of building it is.

(NYC real estate agent, property owner and experienced in selling buildings and new developments)

Happy to hear more about the plans and discuss the options

[Jamie]

Anonymous member that profit seems low for that cost of house. I might sell it in that case.

I think this is more a question of do you want to live there or buy a new place at this point.

Both decisions have decent financial implications.

[Author]

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