Rent or Sell Primary home, after relocating

Hartford, Connecticut
General Real Estate Investing
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Rent or Sell Primary home, after relocating

Corinne Mongillo
Member since 2025 · 3 posts · 2 votes

Relocating to SC. Our primary home in central CT is worth $520k, we owe $200k on the mortgage. Monthly payments are $1900 (we have a 2.83% mortgage rate, 24 years left). We are looking to buy a house in SC for up to $500k. Current rental market would get about $3500/month for our home in CT ($1500 profit).


Rent the primary house in CT or sell it for $300k profit? 

Selling would lower our mortgage in SC, but keeping it and renting would become an income property grossing $1500/month until the mortgage is paid off, and then $3500+ a month once its paid off. Not to mention the appreciation the house will gain. Is it worth is to own one single family home as a rental? I am willing to hire a property manager to handle things while we are in SC. I should also add that the house has extreme sentimental value as it is my husband's grandmother's house and we are the 3rd generation to be raising a family there. But I don't want emotions to sway my decision making.

Sell for one time lump sum of $300k and have a $200k mortgage in SC, or keep it and have a passive income generating single family rental (which comes with alot of headaches). Should add that we would eventually like to own a multifamily, and this may give us leverage to expand our real estate portfolio. 

Any advice is appreciated!

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David Krulac
Mechanicsburg, PA · Member since 2013 · 3k+ posts · 2k+ votes
8mo

Normally, i would lean in favor of keeping the old personal residence as a rental, but in this case, I would go the opposite way.  Sell the take the $300,000 capital gain TAX FREE, and put long distance rental in the rear view mirror.  However, I would not put the $300,000 into the new SC personal residence, but keep for other expenses or future investment. The mortgage that you get for the new personal residence will be the lowest interest rate and the lowest down payment, when compared to an investment mortgage.  For that reason I would borrow as much as possible on the new SC house and retain the $300,000 for other investments.

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  • Kevin Sobilo
    Realtor · Hanover Twp, PA · Member since 2018 · 3k+ posts · 3k+ votes
    8mo

    @Corinne Mongillo, a few thoughts:

    1. You mention a $300k "profit". I'm not sure if you mean that is actual profit or just the proceeds you would get from a sale. Either way, I am assuming you stand to actually sell for a substantial profit if you sell today. 

    As a primary residence you and your husband would be able to exempt $250k (or $500k if you file jointly) of the profits from the sale from taxation! If you rent the property out, that exemption will eventually go away because a primary residence is one you lived in 2 of the last 5 years. 

    That tax savings is a definitely worth considering!

    2. You say, having a $300k lump sum would lower your mortgage amount in SC?!? Maybe you should consider other options for the money. Once money is locked up in the equity of a property, it is "at risk" because values do go down sometimes, its not immediately available (liquid), and its expensive to access through a HELOC, mortgage, or sale.

    3. You mention buying a multifamily in the future, why not NOW with the proceeds of the sale? If you are looking to expand your real estate portfolio and especially if you intend to self manage that allows you to buy a multi-family anywhere you like like SC where you could actively manage it. 

    4. You mention "appreciation the house will gain". You can certainly count of mortgage pay-down to increase your equity, but over the short/mid term you cannot necessarily count on appreciation. Real estate is all local and many markets go through boom and bust cycles and even broader nationwide prices can soften and go down. 

    I believe during the great recession nationwide median home prices dropped ~20%. Even in the years just before covid median prices dropped several %.

    1Reply
  • Theresa HarrisPro Member
    Member since 2019 · 15k+ posts · 11k+ votes
    8mo

    As Kevin mentioned-what is the actual profit you will make on the sale of the home (sales price-purchase price)?  If that is a large amount of money, think of the capital gains implications if you rent it long term.

    Do you plan on moving back to the home in a few years (or ever)?

    What are the full costs of owning that home: insurance, property taxes, repairs, etc?

    0Reply
  • Benjamin AakerPro Member
    Rental Property Investor · Brandon, SD · Member since 2015 · 1k+ posts · 1k+ votes
    8mo

    A better question to ask now is whether you want to be a remote landlord or not. Renting out a single property is hard to do when you are not there. There won't be much margin and there will be headaches. Take the time to research what is involved before considering. 

    1Reply
  • Corinne Mongillo
    OP
    Member since 2025 · 3 posts · 2 votes
    8mo

    I do not plan to return to the house. I did not think about the capital gains. Profit would be around $300k, which would substantially reduce our mortgage in SC. I am 40 so I'm looking to do a 15 year mortgage, not a 30 year on the new home. But I also like the idea of having retirement income coming in through the house in CT. I am worried abiout upkeep, and vacancy. I was hoping to hire a property management company, but it might be complicated. We have an above ground pool, the house will need some small renovations in the years to come, and other logistics like you mentioned. I fear that a property management company obviously won't care for the property like I would. Another pro is that I have an open HELOC on the property that I would use to invest in another property (multi family) that I would lose if we sold.

    Insurance = $1500/year

    Taxes $7000/year

    Repairs, variable (We did a complete remodel in 2018 so everything is pretty new, including kitchen, floors. Basement and roof new in 2023. 

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  • Jules Aton
    MD/DC · Member since 2024 · 1k+ posts · 1k+ votes
    8mo

    I suspect I’m in the minority but I make investment plans based on 5 and 10 year chunks. 24 years is a long time and managing rentals in retirement can be challenging. 
     Also like others have mentioned definitely consider the homeowner capital gains tax exclusion which can be significant and truly passive. 


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  • David Krulac
    Mechanicsburg, PA · Member since 2013 · 3k+ posts · 2k+ votes
    8mo

    Normally, i would lean in favor of keeping the old personal residence as a rental, but in this case, I would go the opposite way.  Sell the take the $300,000 capital gain TAX FREE, and put long distance rental in the rear view mirror.  However, I would not put the $300,000 into the new SC personal residence, but keep for other expenses or future investment. The mortgage that you get for the new personal residence will be the lowest interest rate and the lowest down payment, when compared to an investment mortgage.  For that reason I would borrow as much as possible on the new SC house and retain the $300,000 for other investments.

    2Reply
  • Samuel Eddinger
    Meriden, CT · Member since 2018 · 704 posts · 501 votes
    8mo

    @Corinne Mongillo - a lot of us believe the asset is the loan itself.  At 2.83%, I'd be keeping it as long as I possibly could (especially if it cash flows).  While there is a lot of really good information from the other posters, you could always 1031 down the road, or keep it until you die with a step up basis for your heirs and they would pay no tax.  Most people I know regret selling the asset years in the future when the price is double or triple what they got!

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