Updated about 2 years ago on . Most recent reply
Sell "sweat equity home" or rent?
My husband and I are ready to move our family to a quieter area outside the city and we were pretty set on selling our current home, which we stand to make a hefty profit off (from sweat equity). The thought of no or very low mortgage was nice! But my husband recently posed the question to me about renting our house, instead of selling. So I have been thinking through this and trying to do some research. Hoping the BP community has some good insight! So the run down - we have a guest house in the back which we have rented out on AirBNB and rented to family/friends (so that's one rental) and we have the "ever coveted" low interest rate on our home (which helps our monthly mortgage to be manageable). My husband inherited a house last year but out of state, with no mortgage (such a blessing!) but wasn't kept up very well (already replaced the AC). We thought we could potentially do a HELOC on the out of state house, to put down on our future house/land? We don't have enough cash for a future spot w/o selling our home or HELOC/pulling from our other rental...So my overall question is would it be worth renting our (current) home for an easy profit (if it rents) and still rent out guest house out (2 rentals). Originally we thought we would maybe do a HELOC on current house for future spot, but we would like to leverage ourselves in the best way. Feels like a lot of moving parts :-)
Any advice is welcomed!!
Most Popular Reply
Sell the inherited house. No capital gains due to stepped up basis for house (date of death value is basis). Run the numbers and your predilections afterwards and decide.