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Rent or Sell?

June 9th, 2010 at 11:07 am

Now that we're retired and free to move about the world without the encumbrance of jobs, we've been contemplating what to do with our condo in CA. Here is what we have discussed so far:

Sell It

No more PITI, HOA fees, and utilities;

We could invest the equity or use it for something else, TBD.

The real estate market's just starting to improve here, so it might be prudent to wait;

We might owe taxes since we would not be buying a replacement property.

Rent It

The rent would cover all or almost all expenses (PITI/HOA/Management);

We could save or invest what we now pay in PITI/HOA;

We know a good property manager.

Renting can be a disaster with the wrong tenants;

Renting won't help us tax-wise due to income limits.


So, back to the question: rent or sell? After much thought and discussion, we've decided to do neither. We're going to keep the condo and look at things again in a year or so. This way, we will have a place to stay whenever we're in CA, and we will be spending about 4 months here in 2010. Dh, as an Emeritus Professor, still has access to the campus library and other resources and he wants to do some research/writing (with no stress or deadlines, just for enjoyment). We'll keep the Prius parked in the garage for wheels and thankfully, not have to deal with packing and moving dh's office just yet.

6 Responses to “Rent or Sell?”

  1. monkeymama Says:

    You'll want to look into the tax consequences of selling. It doesn't matter what you do with the money, but it does matter if it was your primary residence, 2 of the last 5 years. So, selling sooner rather than later, could be a big tax consideration.

    The rules have also recently changed, which no one seems to know about. I believe they have not changed for people who rent out a residence. They have been making it harder for people to move into their rentals, make them a residence, and then sell tax-free. So, I don't think that affects you (off the top of my head), since you are doing it the other way around, but lots to figure out if you are looking at a gain.

    The 2 of 5 rule makes "doing nothing," a viable alternative for now.

  2. Phenomenal Woman Says:

    It depends where at in CA?

    I know where I live, townhouses and condos are actully doing better than houses when it comes to value increasing in some counties.

    I was suprise to hear this on the news but it makes sense for the type of people in our area.

  3. Ima saver Says:

    I think you are very wise to wait a year. Renting long distance can be scary.

  4. lartiga Says:

    monkeymama: Thanks for the reminder about the 2/5 year rule in case we rent it. For now, tax-wise we will treat it as a 2nd residence.

    PW: Our condo is in Silicon Valley and although the listings in our complex are few and are selling quickly, units are going for less than 2003 prices (this is when we bought). I'd like to sell it for at least what we paid.

    Julie (Ima): Yes, we have already had a bad experience with rentals at a distance. We really don't want to be landlords any more.

  5. Denise Says:

    Sometimes doing nothing is the hardest thing we can do! Good luck with everything.


  6. EarlyRetireeTamara Says:

    Actually, doing nothing is a decision!

    Loving your travel focus. DH and I are planning to do same when we are both fully retired in mid-2012. (I took the plunge in April of this year (2011) and he is set to follow me in May of 2012.)

    We already travel extensively, but can't wait to move into loooong vacation mode next year! First up for us is a two week cross county trip followed by a 2-week New England/Eastern Canadian cruise. Oh boy are we loving life at the moment!

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