Newbie in Cincinnati, Ohio

8 Replies

Hey all! Glad to be in this community and looks like lots of great information. I've read through some of the beginner guides on here. 

I'm currently working in tech and make a decent salary with money leftover to invest in. I'm 24 now and bought my current house with little money down a little over 3 years ago.

My current plan is to rent this house and possibly move into a duplex or a comparable, modest home and look for more deals. 

I guess I'm a little lost where to go right now on how to evaluate if its "worth it" to rent my current house. I got it at a discount compared to the area, so I am thinking so.

Thanks and glad to be here!

Have you given any thought to the idea of selling your current house since you bought it at a discount and it’s a sellers market right now? If the numbers don’t work too great for it as a rental that is what I would do.

As far as it being worth renting it out that is pretty straight forward. You’ve lived there for three years so you know all the financial details. Simply subtract your mortgage from half the anticipated gross monthly rent. The difference should give you a ballpark idea of your potential monthly cash flow. There are more detailed calculations if you want to factor in maintenance, vacancy, property tax, insurance, etc.

I have thought about selling. I think the area isonly picking up and that prices will increase so it's probably good to hold on. I guess I just need to run some calculations and see what it would look like. 

Nice. I definitely wouldn’t hurt to get some comps in your area to have an idea of what you could sell for. especially since you’d be avoiding capital gains tax. A third option if you decide you want to keep the house but the rental numbers aren’t appealing enough, would be to use a heloc to pull out some equity and help you get started with your next buy.

Originally posted by @Zachary LaJoye :

Nice. I definitely wouldn’t hurt to get some comps in your area to have an idea of what you could sell for. especially since you’d be avoiding capital gains tax. A third option if you decide you want to keep the house but the rental numbers aren’t appealing enough, would be to use a heloc to pull out some equity and help you get started with your next buy.

 Nice to meet you both. Sadly, with the changes in the tax code with 2018 tax law, two years is no longer enough to avoid capital gains tax. I think you have to live there for 5 years now. 

I’m not a tax professional so you should probably double check this but as far as I’m aware you can still exclude a portion of the sale of your primary residence if you meet the previously established requirement of using it as such for 2/5 previous years. The amounts allowed to be excluded and claimed tax-free are $250,000 if single and $500,000 if married and filing jointly.

Originally posted by @Christopher Hikel :
Originally posted by @Zachary LaJoye:

Nice. I definitely wouldn’t hurt to get some comps in your area to have an idea of what you could sell for. especially since you’d be avoiding capital gains tax. A third option if you decide you want to keep the house but the rental numbers aren’t appealing enough, would be to use a heloc to pull out some equity and help you get started with your next buy.

 Nice to meet you both. Sadly, with the changes in the tax code with 2018 tax law, two years is no longer enough to avoid capital gains tax. I think you have to live there for 5 years now. 

The capital gains thing would have been nice but I think I am positioned pretty well to start renting.

I appreciate the welcomes!

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