Rent or Sell my primary residence ?

1 Reply

I own a property which is my primary residence and I am planning to rent out the property for the next 3- 4 years. I have stayed in this property for less than 2 years ( 22 months ) and wanted to understand what will be the tax implications If I sell the property in the next 3-4 years. I believe the property will appreciate in the coming years so wanted to rent for the next 3-4 years and then sell the property.

For federal tax purposes, you will pay no taxes on the profit of the sale of your primary residence if you lived in it for 2 out of the past 5 years. State tax laws vary. If you paid retail price for the house, it doesn't make a good rental property for cash flow purposes. Hoping that it will appreciate in value is speculation. Homes can lose value because of unforeseen things that are out of our control. I would sell it, since this is the best time in a decade to sell. If you want a rental property, you should probably look in a different area of town for a distressed property that may need some repairs.