I have a rental that I purchased in 1995 for 220k and lived in as owner occupied until 2001 in Bay Area. It’s now around 900k. It’s renting for 3k monthly. Should I sell?
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Well, you don’t get the capital gains exclusion though, right (250k single, 500k married)? If you can, I would go back and live there to earn that capital gains exclusion back before selling. Or, you can try to do what I and some others are doing which is a 1031 exchange where you sell your place and replace it with something else. Where is the place first of all? Do you need the cash?
It’s in San Jose. Don’t need the cash. Don’t really want to do a 1031 either. I’m just a bit worried that the rent is low for a 900k house. The appreciation is the key, but who knows how long that will last for
Then raise the rent. Or do some of the newly enacted SJ laws prevent you from raising too much? Definitely a keeper with Google coming. No brainer.
It’s needs a bit of work. Even if I do fix it up nicely, probably max I could get in that area is 3500. True that since Google is coming and even other tech giants. Microsoft just bought a big purchase land off of 237 between Milpitas and Alviso. Apple has made yet another big land purchase across from Paypal near First street.
Well, either way (fix up or not) definitely keep it. Cha-ching down the road…
My 8 unit Tahoe multi family is worth $1m grosses $110/year…There are plenty of places that will get you a better return for your $900k…Think 1031
The key to building wealth is to 1031 into higher ROI…The other option is to refi and buy a higher cap rate property. .
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How about keeping it (since prime) and borrowing equity from it to buy another bigger place? Cha-ching or no cha-ching???
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That is a good idea. My mortgage rate is low too (3.25 with about 13 years left on a 15 year). The mortgage balance too is low at about 210,000
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I just spoke with a painter, friend of mine. They just finished 300 < > units somewhere by Fair Oaks and Hwy. 101, and started painting another 400-500 units near the Great Mall in Milpitas.
Your borrowing will be limited due to the low rent minus costs…say $30k net return…I doubt you can borrow much over $300k…Meaning 1031 is the only way to increase your IRR…Figure my Tahoe place will net you 2.5 times IRR net…
Well, before we spend your equity/money @bayarearentalland, are you up for owning more property and possibly property that is far away though? You may be like me, semi-content with what you have already. Just sayin’…
I’m content as is now and don’t really want property out of the area to worry about.
Ok, just to throw it out there for discussion, can you expand your rental property???
The local rental market is way slower than home sellers. I had 3 for lease 95008, 1 year old, two 50 year old SFHs in 95128. Only one with complete furnishing is rented. Prospects often look at it and walk away. The one in Campbell price has reduced 3X. Off market right now. Unless it is perfect most renters do not ask for a break.
Since 2016 there were very few people coming to Silicon Valley for jobs. All home seekers are local wanting to move up or go to a better location. If you want to raise the rent look around first. 95128 is asking for $3200 3/2 redid inside, now new bath on Patch Ave by City College. There are also tons of new condos, apts surfacing, some companies are offering free rent 1st month.
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No, I can’t add on to the property. The lot is too small. about 4500 SF and the house is just under 1800 SF. 3bed /3 full bath with a loft upstairs
Well, if @Elt1 is correct about how much you can borrow, how about accessing your primary home for a home equity loan? I just picked up a 750K line via US Bank for no cost and the rate is at prime for me after intro of 1.99% for 6 mo.
95128 & 95126 will be changed/changing with Google downtown complex.
mine is in 95133. about 10-15 minute drive to the new google campus eventually. about a couple miles from the new Bart line coming to Berryessa