To Sell or to Rent

[Spencer Ruble]

First time poster but love the site and get a ton of value from past forum conversations. Moving from Chattanooga back to Atlanta and looking for advice on whether to sell or rent our existing home when we move. We do not need the equity for the next house.  Goal is to move mid-late 2024  

Purchase June 2022: $510,500

Down Payment: $102,100

Interest rate: 4.875%

Mortgage balance: $397,959

Monthly mortgage, tax, insurance:$2,465

Estimated rent $3,000 

The home has an estimated sell price of $550,000 today and the area will continue to appreciate well.

Home is in good shape. If I sold, I would try to find a rental property or two with the proceeds. 

Any advice would be greatly appreciated. 

Thanks!

[Josh Bowser]

Hey Spencer - if you like the area and can squeak out a bit of cashflow I'd consider hanging on to it and renting it out. I'd try to find a property manager that can help you keep an eye on it and let it appreciate. 

I'd be happy to go over this with you if you have any questions - feel free to reach out at the contact info in bio.

[Spencer Ruble]

Quote from @Josh Bowser:

Hey Spencer - if you like the area and can squeak out a bit of cashflow I'd consider hanging on to it and renting it out. I'd try to find a property manager that can help you keep an eye on it and let it appreciate. 

I'd be happy to go over this with you if you have any questions - feel free to reach out at the contact info in bio.

Thank you for the advice! Gut saying try to rent for a year and then re-evaluate. 

[Spencer Tillman]

Quote from @Spencer Ruble:

Hey Spencer (great name!)

Renting this one vs selling and buying multiple rentals? Personally, I'd recommend multiple properties, but that all depends on your long term goals. Although if you are potentially moving in the next 3-6 months then that might not be the wisest strategy. 

I'd agree with @Josh Bowser about renting for now and revisit this again in a year if you don't need the cash for ATL home.

Feel free to reach out if you want to discuss options.

Good luck with whatever decision you make!

Spencer

[Spencer Ruble]

Quote from @Spencer Tillman:

Quote from @Spencer Ruble:

Hey Spencer (great name!)

Renting this one vs selling and buying multiple rentals? Personally, I'd recommend multiple properties, but that all depends on your long term goals. Although if you are potentially moving in the next 3-6 months then that might not be the wisest strategy. 

I'd agree with @Josh Bowser about renting for now and revisit this again in a year if you don't need the cash for ATL home.

Feel free to reach out if you want to discuss options.

Good luck with whatever decision you make!

Spencer

Hey Spencer! Great name indeed! Thank you for the advice. 

I need to learn more about tax implications but since we would have been in the house for two years I think renting for 1-2 years and then making a decision is the move. Would be able to exit and avoid capital gains if I understand correctly. 

Also, seems like houses are sitting on the market a little longer than they have right now in my area. Ton of new build neighborhoods going in which have increased supply. 

[Spencer Tillman]

Quote from @Spencer Ruble:

Quote from @Spencer Tillman:

Quote from @Spencer Ruble:

Hey Spencer (great name!)

Renting this one vs selling and buying multiple rentals? Personally, I'd recommend multiple properties, but that all depends on your long term goals. Although if you are potentially moving in the next 3-6 months then that might not be the wisest strategy. 

I'd agree with @Josh Bowser about renting for now and revisit this again in a year if you don't need the cash for ATL home.

Feel free to reach out if you want to discuss options.

Good luck with whatever decision you make!

Spencer

Hey Spencer! Great name indeed! Thank you for the advice. 

I need to learn more about tax implications but since we would have been in the house for two years I think renting for 1-2 years and then making a decision is the move. Would be able to exit and avoid capital gains if I understand correctly. 

Also, seems like houses are sitting on the market a little longer than they have right now in my area. Ton of new build neighborhoods going in which have increased supply. 

I would definitely speak to a tax pro before finalizing any plans. A 1031 exchange (45 days to find another property, 180 days to close) might something to think about.

If I was in your shoes:

1. Rent it for a year. Look for multiple rentals to 1031 exchange into. More time to think. 45 days can sneak up on you.

or

2. Sell now and 1031 into ATL property. If not interested in building a portfolio.

or

3. Rent and hold forever.

I'm sure there are more. Rate drops are still supposedly coming this year also.

IIRC external links are a no-no in the forum so I'll message you a current Chatt market report so you can gauge numbers yourself.

Good luck!

Spencer

[Basit Siddiqi]

The property appreciated about $40,000 over 2 years which is $20,000 every year.

$20,000 / $102,100 is about 20% which is a hard return to beat
You are likely cash-flow negative by a few percentage points but it looks like you are getting atleast 15% return.