outtarentals
Recycles dryer sheets
- Joined
- Mar 28, 2007
- Messages
- 149
I've been following this forum for some time with great interest - but now have a big decision to make about what to do with money coming to me next month from the sale of a rental I've owned for 30 years. It'll be about $650K after capital gains taxes and expenses.
Some background - I'm a widow in my late 60's in Southern California. I have pensions - $1500 a month - and another 3 rentals I own free and clear bring me about $5000 a month. The taxes and insurance on these three cost about $500 a month for all three (I've owned them for 20-30 years - so taxes are low) plus I allow about $1000 a month maintenance on all 3 combined. So - say $3500 a month from these. I still have good depreciation on these as I got 100% step up basis on them when my husband died. ( California is one of the 9 Community property states that allow 100% step up basis when a spouse dies).
I pay about $900 a month on the mortgage of my home (at 5.25%) and I have very good health care and long term health care insurance. I don't owe anything else. I'm in good health and have a very busy life with quite a bit of travelling but have simple needs so am looking at another 20 years or so. I don't have children but want to leave something to my friends and some charities.
I sold another rental last year and received $400K from that. $100K is invested in an annuity, and I have put the rest with a financial company who has earned me about 12 - 13% on the remaining 300k over the past year in a fairly conservative mix of mutual funds. They've been paying me another $1500 a month from this and they pay themselves 1% as their fee - which is not included in the 12-13% they've made for me. I know NOTHING about the stock market and have always been in rentals. Now, I don't know what to do and am afraid if I put the rest of the money with this firm that there could be a big stock market downturn even though they are reputable and have done well this year in this good market. I am also concerned about the taxes I'll pay with no shelters to speak of if I get rid of my other 3 rentals that are getting older. If I sold them outright - before the 15% capital gain rate sunsets in 2010, I'd have perhaps another $1.2 million to invest. Any advice? What would you do?
Incidentally, my late husband & I started with nothing but retired at 40 with rentals we worked on ourselves. I'm a firm believer in Early Retirement! Outtarentals.
Some background - I'm a widow in my late 60's in Southern California. I have pensions - $1500 a month - and another 3 rentals I own free and clear bring me about $5000 a month. The taxes and insurance on these three cost about $500 a month for all three (I've owned them for 20-30 years - so taxes are low) plus I allow about $1000 a month maintenance on all 3 combined. So - say $3500 a month from these. I still have good depreciation on these as I got 100% step up basis on them when my husband died. ( California is one of the 9 Community property states that allow 100% step up basis when a spouse dies).
I pay about $900 a month on the mortgage of my home (at 5.25%) and I have very good health care and long term health care insurance. I don't owe anything else. I'm in good health and have a very busy life with quite a bit of travelling but have simple needs so am looking at another 20 years or so. I don't have children but want to leave something to my friends and some charities.
I sold another rental last year and received $400K from that. $100K is invested in an annuity, and I have put the rest with a financial company who has earned me about 12 - 13% on the remaining 300k over the past year in a fairly conservative mix of mutual funds. They've been paying me another $1500 a month from this and they pay themselves 1% as their fee - which is not included in the 12-13% they've made for me. I know NOTHING about the stock market and have always been in rentals. Now, I don't know what to do and am afraid if I put the rest of the money with this firm that there could be a big stock market downturn even though they are reputable and have done well this year in this good market. I am also concerned about the taxes I'll pay with no shelters to speak of if I get rid of my other 3 rentals that are getting older. If I sold them outright - before the 15% capital gain rate sunsets in 2010, I'd have perhaps another $1.2 million to invest. Any advice? What would you do?
Incidentally, my late husband & I started with nothing but retired at 40 with rentals we worked on ourselves. I'm a firm believer in Early Retirement! Outtarentals.