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Time to sell?

Discussion in 'Living in Sin (City that is)' started by tominiowa, Sep 24, 2014.

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  1. tominiowa

    tominiowa High-Roller

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    Market has rebounded well and I am seriously thinking it is time to sell 2 of my 4 rental houses,
    Tenants are moving out and I think I rather sell versus finding new tenants, plus at today's prices
    the return renting is not what it was.

    Anyone else with rentals thinking about selling?

    The house in Henderson has really went up in Value. North Las Vegas house not so much but still a decent profit.

    Got realtors to agree to 5% commission which some will say is not enough and others agree that is fair.
     
    Last edited: Sep 24, 2014
  2. NickyDim

    NickyDim Hockey is life

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    Prices have leveled off recently with only modest gains, not like the huge 30%+ increases that was at the end of 2012 and 2013. We rent now but have no plans to sell because this home will become our retirement home in 18 months. Monthly income vs. capital gains? Tough question for you. You'd have to figure out how much you'd net after commission, upgrades for sale, and then tax on the gains (not your primary residence). Then determine if what you net is worth selling.

    Rental prices have gone down. We are into our 3rd lease with our current tenants. They complained about the rent not being as competitive as others on the market in the same neighborhood so we decidee to give them a small reduction so we wouldn't have to find new tenants. We're lucky, they've kept the place in great shape, they know we plan to move out there in 2016, and it was cheaper to make them happy than to pay for our management company's finders fee for a new tenant. So for the reduction, we had them sign a 2 year lease with our option to give them 90 days notice to evict in the second year of the lease. Piece of mind until I take over the home for me, a small savings for them, a sign of good faith so they continue to treat the property with respect, a win-win for both of us.

    Good luck in what you decide. And if you do sell, let us know how much of a % gain you made.
     
  3. 8Summer8

    8Summer8 Tourist

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    we also thought of about selling rental when our tenant broke lease in June but decided to wait until next year so we have more time to review options such as 1031 exchange.
     
  4. NickyDim

    NickyDim Hockey is life

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    how does IRC 1031 work? I'm a little confused. From what I read, if I sell my investment property AND purchase another with those funds, then I'm protected from Capital gains tax??? And if I just sell the property for it's value then I'll have to pay the tax???

    This is not like my current resident home which is sheltered from Cap Gains now. I was told to avoid paying taxes on profit the investment home would have to become my primary residence for 3 years. But now when I move to LV and move into that house I won't have to wait the 3 years as a primary if I'm buying another home???? Can anyone clarify that for me? Because I think my wife and I are going to move up into a nicer home when we move by adding some capital from the sale of our current residence on Long Island + sale of investment home in LV, if we are protected.
     
  5. tominiowa

    tominiowa High-Roller

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    You would need to sell your Long Island home as your personal residence to avoid taxes then move into the current rental home in Vegas for 3 years as your permanent home then you could sell it as your primary home with no taxes and then upgrade. If you just sell your Long Island home and rental home and spend that money to upgrade you would pay capital gain tax on the house in Vegas. 1031 exchanges to avoid tax would be selling a rental house and using that money to buy another rental not a primary house. It doesn't avoid tax it just delays tax till you sell the next one. Basis moves with the properties. Persoanlly I think it is wise to pay the tax now as I foresee capital gains tax eventually getting higher the way our government is spending they will look here for more money. Remember they believe it is only rich people who have capital gains. I do not think you will ever see capital gain tax lower. Best we could hope for is the same. Of course if you kept the rental properties till death then that is a whole another set of things which I won't get into today.
     
  6. NickyDim

    NickyDim Hockey is life

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    Then I guess I'll be moving into the rental for 3 years. That was the original plan. Take the rent money that's building up and use it to remodel the home to our liking for us to live in. Thanks Tom for the clarification.
     
  7. wigwam_salesman

    wigwam_salesman VIP Whale

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    Wow - commission is high there. I might emigrate and become a realtor!

    In the UK commission rates are usually between 2.5 and 3 percent, but often you an get them down to 1.5.
     
  8. Corinne

    Corinne Low-Roller

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    That high. Down to 1% in Buckinghamshire. However the whole thing works very differently in the US.
     
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