All Forum Posts by: Jason Hill

My wife and I are about to buy a house in another state to be our primary residence. I'll be moving there immediately however; my wife has to finish her graduate degree and will be moving down in May. That works out nicely as we will have lived in our current house 2 years as of Feb '12.

I plan on turning our current house into a rental, but, a plan B is always nice. If we decide to sell it at some point, I know that if we lived in it 2 of the last 5 years we don't get hit with capital gains. The problem is that I will be moving out before the 2 years. Our only saving grace is that my wife is on the mortgage as well.

My Question: With all the above in consideration if we sell within the time limits, will we be hit with capital gains?

You've done a better job of asking my question than I have. I've read that some states do not guard the beneficiary as well as others. I'm wondering if GA protects the beneficiary well enough to go through the trouble to setup a trust or should I just own the property in my name.

I'm inheriting some land, since I also do real estate investing I would rather be legally associated with as little personal assets as possible. This led me to land trusts where it is very hard to determine the owner of said property, and difficult to break that legal status but, that's in states that strongly support land trusts. However; what's the point of going through that trouble if it's easy to pierce the anonymity of that legal device in GA?

I appreciate your time and excellent response.

Keep in mind a $180K house may be chump change else where but in Chattanooga, it's a decent house.

Value: 180K
Loan: 140K
Rent rates: ~1500 (4/2.5)
PI: 750
HOA: $350/yr
Taxes: $1400/yr
Insurance: $1000/yr (obviously this will change)

It doesn't explicitly outlaw rentals but, it does seem to suck the life out of any joy of home ownership. I'm sure it's not as bad as it could be but, I grew up in a rural area and chaff to the idea of HOAs.

Why doesn't it sound like a good rental?

I'll try to make this as brief as possible. In about 10 months my wife and I plan on moving. We arn't sure what to do with our current primary residence.

It's in a very desirable middle-upper middle class neighborhood. Our boots on the ground estimation is that we could get 2x P&I for rent. We will be building a house debt free so selling will help tremendously with that, however; it also means we could easily cover vacancies.

My worries are these:
1. The house is in our name (no liability protection). Would a warranty deed to an LLC work?
2. The house is in an HOA neighborhood that doesn't outright forbid rentals but, I'm sure it doesn't like them. I would pay the HOA fees of course.
3. My "Sominex" fund (nod to bawld guy) isn't huge but enough to cover one or two major repairs. I have another rental, which again I can cover both mortgage payments, however; I'm not keen on that.

So do the benefits of turning this into a rental outweigh the negatives?

That sounds like a plan. I appreciate your time.

Any further ideas from others would be appreciated as well, I'm always up for different opinions.

Yearly, The propery is in Georgia.

I asked them when we were talking about renting if they wanted to buy and they said no. The had sold their house that was in bad shape and were afraid to have to maintain another with him being disabled.