Would it be best to sell now

Question

Would now be the best time to take advantage and sell all of your rental properties? My husb wants to take advantage of the buyer's market and properties are at an all time high but than there aren't any good deals to be found in exchange? thoughts?

Linda Thomas · Answer

@bryan danger yeah that's my dilemma do what with the profits and than worry about the high amount of capital gains I would have to pay so in reality it's not worth it but eventually we will have to pay it right? lol

Bryan Danger · Answer

And do what with the profits??Even in this market, if you have to turn around and pay full capital gains on the sales it's hard to imagine you making a killing on your cash out and you've got zero portfolio left to show for it.  Whats the plan with what cash you have left after the capital gains hit?  Put it into the stock market (that's been at an all time high for way too long)?  No thank you.

There are still decent exchange options out there, you just just have to find them (we just did) but trust me when i say losing up to 37% to capital gains makes almost any exchange look good!  If you want/need the cash, why not 1031 into something that will clearly have a lot of equity afterword thanks to the exchange and then refi the cash back out so you can have it tax free (and keep/grow the portfolio)??

Gayle Eisner · Answer

Greetings:

You might consider doing a house hack.  Purchase mulit-unit and live in one and rent the other , hold on to some of the cash, until prices take a decline for you.  If you can afford to move and are prepared to live in the smaller unit, then you can "wait things out" until the market corrects and purchase something else at a profitable margin.  In the meantime, you can collect some rent, have a place to reasonably live and create equity and an investment at the same time.

Or you might think about selling a rental, putting money into the new home, with the intent of converting/building something on the property, such as an ADU.  Here in Bay Area, California, prices are already coming down so it might not be a good idea to sell the rentals but rental income is skyrocketing here. Good luck! A lot of us have that same dilemma.

Theresa Harris · Answer

It depends.  Interest rates are still low, but you're going to have to buy another place to live.  Many places still have houses selling well and it is a seller's market.