All Forum Posts by: Sarah Maze

@Brad S. Thanks for running the detailed numbers! It's pretty crazy the amount of information you can find on the internet. :P That helps back up our decision to sell the property.

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Quote from @Jonathan Stone:

Sarah,

I am also living in WA originially from the East Bay Area. That said. You do have to think through your options, you said you wanted to take the 500k tax exemption by selling with the 5 year window. If you have 500k in equity, not sure what the actual equity is: would you rather - repurchase your current property and assume and 2.6% rate

find some other investment that is made with the intention of being an investment

You said the house is large and new - so current chances that you need major CAPEX is low but as this home ages and is in an expensive market realize that those updates will also be expensive. I would guess if you do have 500k in equity you could probably outproduce the cashflow in most markets oustide of CA, and could possibly diversify into more than 1 property.

Just some food for thought.

Thank you for that. I asked my husband if we would choose to repurchase that house at that interest rate as a rental and he immediately responded "No" without any hesitation, and I was right there with him, so I think that helped us both understand where we want to go with this. We both like the idea of diversification and not renting in California, for sure.

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My husband and I have been wanting to get into REI for a little while now. We have been researching and reading a lot (analysis paralysis!) and really want to take that first step. We live in Washington state, but we will probably invest in a couple properties out of state.

My question right now, though, revolves around a house that we own in California. I'm currently renting it to a family member under the agreement that he moves out in time for us to sell it within the 5 year window so my husband and I will have lived in it as a primary residence for 2 of the last 5 years (we moved up to WA a year and a half ago). We want that $500k non-taxed equity!

However, the house is in a decently rentable area and I refinanced during the low rate days at a 2.615% rate. I could probably rent it for $750-$1000 per month over what the standard monthly costs are right now (not including vacancy, maintenance, management company, etc). I haven't really run the numbers because until now I've never considered keeping it as a real rental. And my husband and I have both had *horrible* landlord experiences in California in the past, and we just don't want to deal with California's renting atmosphere. But the house is only 10 years old, it's huge, it's in a decent area that's still being developed (Eastern East SF Bay Area), and it has the potential to earn us some money.

Does the earning potential of the house make up for the headaches of renting in CA and having to pay a boatload of taxes on the equity when we eventually do sell? If we instead sell in the 5 year window, we could take that equity and put it into rentals not in CA and other investments. I just don't know enough to figure out what the right answer is and would really appreciate some insight and advice.

Thanks!

Sarah

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All Forum Posts by: Sarah Maze

Sarah Maze has started 1 posts and replied 3 times.

Post: Sell or Keep California House?

Post: Sell or Keep California House?

Post: Sell or Keep California House?