Sorry for a super late reply.
I am stuck in this confusion mainly because of `personal residence exemption`. I have about a little over year and I want to make that decision because my tenants lease is due for renewal soon.
I find it hard to decide because I have not made huge profit on the house about `400K` and realtors are going to take away some of it in terms of commission (Not want to go down upcoming changes in real estate commission rabbit hole here). So, by todays rules I will probably make about 300K.
However, in theory if I keep the house as is for 20 years, most probably my tenants will pay off the whole mortgage (I may end up spending 200K or so on renovations, unoccupied property etc)
But at the end of 20 years, I may have access to all 1.2M + appreciated cost or free cash flow due to rent.
The main issue I have is my current primary residence is on 7/1. I am currently comfortable and don't struggle to pay mortgage but if some long hardships come on my family then there is a risk that I may struggle to maintain my lifestyle without selling my rental home/other investments.
And rental home does not provide lot of liquidity.
I am mostly leaning towards selling the home due to risk of future returns, low liquidity, tax advantage and possible repair costs on old home.
Thanks everyone
I am stuck in this confusion mainly because of `personal residence exemption`. I have about a little over year and I want to make that decision because my tenants lease is due for renewal soon.
I find it hard to decide because I have not made huge profit on the house about `400K` and realtors are going to take away some of it in terms of commission (Not want to go down upcoming changes in real estate commission rabbit hole here). So, by todays rules I will probably make about 300K.
However, in theory if I keep the house as is for 20 years, most probably my tenants will pay off the whole mortgage (I may end up spending 200K or so on renovations, unoccupied property etc)
But at the end of 20 years, I may have access to all 1.2M + appreciated cost or free cash flow due to rent.
The main issue I have is my current primary residence is on 7/1. I am currently comfortable and don't struggle to pay mortgage but if some long hardships come on my family then there is a risk that I may struggle to maintain my lifestyle without selling my rental home/other investments.
And rental home does not provide lot of liquidity.
I am mostly leaning towards selling the home due to risk of future returns, low liquidity, tax advantage and possible repair costs on old home.
Thanks everyone
Statistics: Posted by thriftyFaramir — Fri Apr 05, 2024 1:55 am