We own a 2-unit rental property in Hawaii that brings us in what I call a "small pension." Wife handles the property, which Zillow values at $1.2 million, but is only bringing us in $30K/year because she likes the fact that our tenants have been there for more than a decade. After property taxes, we net $25K.
I'm wondering how to value the property for retirement: the amount it SHOULD bring in (approx. $50K/year, going by similar rentals), or the income we'd have if we sold it & invested the approx. $1 million we would net?
We've done major upgrades to the property since we bought it in 1987, & it's fully paid off, but we would have to sink another $25K before we sold it, just to upgrade it after so many years of renting the units out. I'm retired, & wife retires July 1. Hawaii has a 10% capital gains tax for our situation.
I'm wondering how to value the property for retirement: the amount it SHOULD bring in (approx. $50K/year, going by similar rentals), or the income we'd have if we sold it & invested the approx. $1 million we would net?
We've done major upgrades to the property since we bought it in 1987, & it's fully paid off, but we would have to sink another $25K before we sold it, just to upgrade it after so many years of renting the units out. I'm retired, & wife retires July 1. Hawaii has a 10% capital gains tax for our situation.