Ed Waggoner
Dryer sheet wannabe
Hello all,
I have a question for current or former multi-family landlords. I am being as thorough as possible in my explanation in order to minimize any questions, so I hope my listed information helps that. I'm 57 yrs old and I am retiring from my business of 20 years in November 2020. My oldest son (31 yrs old) has owned half of the business for the last 7 years. I started him 2 years after finishing his 4 year business degree and he has proven himself, so I am giving him my half. He's married 3 yrs, no kids yet but planing to start next year. My wife will retire June 2022 at 56 yrs old and her retirement will pay for our medical and a few bucks left over. I currently own 40 single family houses within 20 minutes of my house, I live in Midlothian, VA and my rentals are in Richmond City. I purchased 4 to 5 a year since 1997 to 2008. My question is to people who own or sold multiple rental houses: Should I sell them or keep renting them? The average stay for a tenant is 3 years and when they vacate I am doing total renovations to about 5 a year, (the other 5 to 7 houses are partial renovations) the total renovations include, new roof, kitchen, flooring, bathroom(s), windows, paint, lighting and HVAC if needed. I use a small company that gives me great prices so my average full renovation per house is costing $25k, and greatly increases the house by at least $40k if I sold it. Once you put a tenant in it, it's never "NEW" again after they leave.
Here is my current situation-
I have a small annuity about $300k and won't touch it until I am 72 yrs old.
I have $200k in a money market.
The 10 year prediction in RVA says my rentals will go up around $1 to $1.5 million.
My primary house is paid off, worth $475k (taxes $4k a year).
I just put a new roof, HVAC and hot water tank in so no hidden expenses.
2 cars and 1 truck paid off and good for at least additional 5 years.
We paid off all 3 kids undergraduate degrees (My youngest son is starting Medical School this August and he will be financing that).
What I'm concerned about is capital gains, up depreciation, and taxes.
Should I sell, pay all the taxes and fees and put the money into something that gives me a decent return and never think about a rental issue or tenant again? OR should I keep them and have them managed and sell one every few years if I need extra renovation money or the wife and I want to buy something or to supplement my income.
Your advice would be much appreciated!
Thanks in advance.
I have a question for current or former multi-family landlords. I am being as thorough as possible in my explanation in order to minimize any questions, so I hope my listed information helps that. I'm 57 yrs old and I am retiring from my business of 20 years in November 2020. My oldest son (31 yrs old) has owned half of the business for the last 7 years. I started him 2 years after finishing his 4 year business degree and he has proven himself, so I am giving him my half. He's married 3 yrs, no kids yet but planing to start next year. My wife will retire June 2022 at 56 yrs old and her retirement will pay for our medical and a few bucks left over. I currently own 40 single family houses within 20 minutes of my house, I live in Midlothian, VA and my rentals are in Richmond City. I purchased 4 to 5 a year since 1997 to 2008. My question is to people who own or sold multiple rental houses: Should I sell them or keep renting them? The average stay for a tenant is 3 years and when they vacate I am doing total renovations to about 5 a year, (the other 5 to 7 houses are partial renovations) the total renovations include, new roof, kitchen, flooring, bathroom(s), windows, paint, lighting and HVAC if needed. I use a small company that gives me great prices so my average full renovation per house is costing $25k, and greatly increases the house by at least $40k if I sold it. Once you put a tenant in it, it's never "NEW" again after they leave.
Here is my current situation-
- Houses after renovation are worth average $150,000 (some more some less)
- Total value of houses: $6 million
- 15 houses have been totally renovated in the last 3 yrs
- Total rent per year that can be collected $535,000.00
- Turn over 10 to 12 houses a year.
- Each turn over is vacant before re-renting 6 to 8 weeks: -$25,000 in lost rent.
- Total average yearly rent collection: $510,000.00
- (Remortgaged 5 houses last year, bank appraised the 5 houses for $800k to pay the other 35 houses off, I have 19 yrs left, borrowed and owe $400k on the 5 houses, they let me borrow 50% of value)
- Mortgages: $39k
- Tax: $20k
- H/O insurance: $15k
- Maintenance: $75k
- Total for full renovations: $125k ($25k x 5 a yr)
- Daughter management: $25k. My daughter will start managing my properties in November and will be building her portfolio for her property management company. She's 28 with a 4 year degree and with her background I believe she will do great. I will soon be very little hands on with some delegating until she is totally up and running.
I have a small annuity about $300k and won't touch it until I am 72 yrs old.
I have $200k in a money market.
The 10 year prediction in RVA says my rentals will go up around $1 to $1.5 million.
My primary house is paid off, worth $475k (taxes $4k a year).
I just put a new roof, HVAC and hot water tank in so no hidden expenses.
2 cars and 1 truck paid off and good for at least additional 5 years.
We paid off all 3 kids undergraduate degrees (My youngest son is starting Medical School this August and he will be financing that).
What I'm concerned about is capital gains, up depreciation, and taxes.
Should I sell, pay all the taxes and fees and put the money into something that gives me a decent return and never think about a rental issue or tenant again? OR should I keep them and have them managed and sell one every few years if I need extra renovation money or the wife and I want to buy something or to supplement my income.
Your advice would be much appreciated!
Thanks in advance.
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