[Anna]

You’ve reached a milestone with your graduation and job acceptance – well done! As a former property owner of my old home -sell

We rented out our home for 8 years. We had 3 tenants during that time. Here are some of the issues we faced from tenants, all of whom were in professional white collar jobs with the local or Federal government.

Tenant 1: 6 large holes (fist to head size) in walls that were patched horribly. Tenant sublet to 5 other people. White shower tiles were literally black. It wasn’t mold or mildew, it was black from dirt. 2 inches of dust on ceiling fans, a garage full of trash. The tenant skipped out on the last months rent.

Tenant 2: Caught the deck and one wall of the house on fire causing $10,000 in damage. Thankfully they had insurance to cover it. Flushing baby wipes down the toilet causing a sewage flood in our basement. Kids colored every door in the house with crayon or marker with no attempt to clean it up (to be fair I have 2 kids and they all did this at some point, but try to clean it up. Numerous cut marks on the counter top because they didn’t use a cutting board.

Tenant 3: Roach infestation, they flushed baby wipes as well and the sewer backed up flooding the basement toilet. (yes, human waste) was covering the floor and walls when we did the inspection. Appliances broken beyond repair , unpaid water bill.

Keep in mind that if you rent it out, it becomes a business asset subject to capital gains in a different way from a primary residence. It’s fine, but there are rules on converting it back and the future tax treatment.

Don’t miss: Is it better to rent or buy a house in USA?

[Cindy]

Do you expect the house to appreciate in the next few years and by how much? Is there a way to add value to the home where you can charge higher rent where it makes sense to do a renovation? Like adding another bedroom or bathroom where you can charge more monthly rent? Is it in a hot short term rental market? Is it near multiple hospitals where you could leave it furnished and rent out to traveling nurses and doctors for a much higher rent?

[Mike]

That’s not enough reward for the risk. One emergency plumber takes away a year’s worth of profit.

Sell.

[Amy]

Do you want to buy in the state where you are going? Do you need the money from sale for down payment? 200 a month isn’t a lot, but I’m assuming your mortgage rate is low. Did you also calculate how mortgage interest and house taxes are a write off?

If it were me, and I didn’t want to buy right away, I would wait to sell and rent. You have 3 years to still sell and not pay capital gains (need to live in 2 out of 5 yrs).

If you want flexibility to be able to buy in new state then sell now.

Congrats and good luck!

Explore these too: Debating about buying a house or condo where I rent instead of renting

[Christina]

Sell. Cap gains tax exemption and no worries, plus it is not cash flowing enough to worth the time and effort.

[Author]

Posts