I know many have the general opinion “never sell.” If I end up moving out of state, I’d have to decide what to do w/ my home in Contra Costa. Zillow thinks I can rent it for just over my PITI, so it looks like a rent/price ratio of like 0.5%. This may be optimistic. I know the biggerpockets folks like a ratio of 1%, but I’ve seen some here say that 0.5% can be OK. Either way, it’s not particularly attractive to me and I’d be an out-of-state landlord.
So what do you think you would do, assuming there’s no financial need to get equity out of the property right now? If I keep it as a rental, we could always come back without worry about being priced out. But I hate the idea of renters living in my home… finishes are not “rental” quality so I assume major repairs would be needed later.
I am in a similar situation and am staring at rent/price ratio of 0.3%
My initial thoughts are to give it for rent for a year and see how the out-of-state landlord experience pans out. I did not consider the rent/price ratio until you mentioned it. What are the disadvantages of a low rent/price ratio like 0.3%?
+1 for selling and taking the 500k max cap gain exemption. Why not? Clean slate and you will have all that cash to enjoy and investment. Do you really want to hire a management company or manage the property from out of state? Life is short and frankly you have better things to do. Since the getting is presumably still good now as you prep for sale, take the money and run. I don’t buy that the market locally will run away from you (esp in Contra Costa) forever.
I just did some research on that last month, I am actually listing my previous primary next month for the very reason. I moved out 1.5 years ago and rented it. I believe I still can claim the exemption up to 500K (250K for single filer). So as long as you don’t move back in after you move out, you got 3 years to sell. And you can repeat that process every 2 years.
So just don’t do Live -> Rent -> Live. If you do, your profit will be prorated.
Primary motivation is purely location of family. I’d stay otherwise. CA housing prices, taxes, etc. are worth it to me for the area. Sure, it’ll be nice to have lower taxes and COL but that’s not the reason I’m thinking of leaving. Also, nothing is set in stone yet. Haven’t even looked for jobs.
Primary motivation is to capture tax-free gain and I could restructure the proceed in more efficient way, who know might buy another one in Fremont with all the things going on. And wife now has realtor license, so cost of selling became lower.