FI by 2024
Recycles dryer sheets
- Joined
- Dec 29, 2013
- Messages
- 331
Hi, looking for thoughts on what I should do about my rental property. I bought it three years ago as a rental. I had solid, responsible tenants for those three years, but they moved out in July. The house has now been empty for 3 months. I've shown it multiple times and received dozens of calls and emails, but nobody has submitted an application.
Since I'm having so much trouble renting the place out, I'm considering selling. This wasn't the long term plan (I was thinking I'd have 3-5 houses by retirement to have supplemental income), but the house has appreciated considerably in the past three years. Comps are $100-120K over what I paid.
According to my research, I am at the bottom end of a reasonable rent for this size house in this neighborhood. Similar sized houses within 2 sq miles are renting for $1550-$1700 per month. I am priced at $1550 per month. I've had three property managers submit their suggested rents to me, and it matches what I'm asking ($1500-$1650). I've asked for feedback from people I've shown the house to and am not hearing anything I can fix (last interested parties' house didn't sell as planned, so they fell through).
Selling would be less of a long term hassle, but doesn't match my original plan. I can lower the price as low as $1400 and still cover expenses, but everything I've read says going below market value is a bad idea. Well priced houses in the neighborhood are selling in about 3 months.
My questions are:
- Should I keep trying to rent out the house, or sell?
- Is there any way to minimize the amount of tax I will pay?
Notes on my tax situation:
- I am 95% sure I won't buy another house within 180 days, so a 1031 exchange is unlikely
- I am active duty military and will be deploying early next year, so my taxes will be low for 2014
- I've never lived in the house so I can't claim use and therefore be exempt from capital gains taxes
TIA for your advice!
Sent from my iPhone using Early Retirement Forum
Since I'm having so much trouble renting the place out, I'm considering selling. This wasn't the long term plan (I was thinking I'd have 3-5 houses by retirement to have supplemental income), but the house has appreciated considerably in the past three years. Comps are $100-120K over what I paid.
According to my research, I am at the bottom end of a reasonable rent for this size house in this neighborhood. Similar sized houses within 2 sq miles are renting for $1550-$1700 per month. I am priced at $1550 per month. I've had three property managers submit their suggested rents to me, and it matches what I'm asking ($1500-$1650). I've asked for feedback from people I've shown the house to and am not hearing anything I can fix (last interested parties' house didn't sell as planned, so they fell through).
Selling would be less of a long term hassle, but doesn't match my original plan. I can lower the price as low as $1400 and still cover expenses, but everything I've read says going below market value is a bad idea. Well priced houses in the neighborhood are selling in about 3 months.
My questions are:
- Should I keep trying to rent out the house, or sell?
- Is there any way to minimize the amount of tax I will pay?
Notes on my tax situation:
- I am 95% sure I won't buy another house within 180 days, so a 1031 exchange is unlikely
- I am active duty military and will be deploying early next year, so my taxes will be low for 2014
- I've never lived in the house so I can't claim use and therefore be exempt from capital gains taxes
TIA for your advice!
Sent from my iPhone using Early Retirement Forum