i’ve talked to a CPA and got that same advice. If I keep it too long – then I pay gains on the almost $180k appreciation…which yes, I already spent. 🙂

another problem is that I earn over $100k…and the tax breaks on passive losses start to get phased out at $100k+. So even though I’d have some losses to offset the negative cash flow – I’d only get about half of them b/c I earn “too much” according to Uncle Sam.

Renting it only makes sense if I hold it long term. If I did that, and held onto it for 20 years – then maybe I’d look back and be glad I did…but I’d have to compare what else Ic ould do with that money if I didn’t convert my home to a rental.

If I rent the house, I lose much of my home interest deduction, so my effective net income goes down b/c now I”m not getting as much of a write off on my income…and at the upper levels, it’s at 33-35% between fed and state. so in reality, if I pump $1000/month into the house, it really is costing me more int hat I lose some of the tax benefits I have now while occupying it.

if I keep it 20 years, and have to pump all that cash itno it – maybe $1300 – what would have happened if I put that money into a 401k or other interest earning investment. even if I just ut it in a hole in the ground, in 5 years I’d have $75k in cash. the house may go up, it may not go up at all.