advice needed: sell the house now, or rent it out?

[The-Shoveler]

[quote=AN]I’m a little late to the party but I personally would sell, keep the free cap gain and buy two $550k house in San Diego. The tax free $400k is too good to pass up. My gut is also telling me that 2 $550k houses would probably cash flow better than the $1.1m house.[/quote]

+1
Great suggestion AN

If you got no choice and your going anyway and you really really want to insure you come back, except I would modify it a little and pick up two rentals (condo probably) below 200K, and one decent place in the 6-700K range that you would not mind moving back to or retiring in later.

Heck if you got that much equity this strategy would not be a bad Idea even if you are not moving.

[Hobie]

All this while starting a new job 😉

Excellant AN.

[EVSDCA]

[quote=Hobie]All this while starting a new job 😉

Excellant AN.[/quote]

Haha…it’s a bit much!

[ljinvestor]

How much do you like the specific area/development? Do you really like your street and especially the lot? A great lot on nice quiet street in area you love would be a keeper in my mind.

If you decide to keep, you might want to refi 5yr ARM to new 7 or 30yr before you leave.

[Coronita]

You wouldn’t happen to be one of the companies relocating to Texas, would you? 🙂

[cantab]

Thanks to everyone for all the suggestions! To clarify one point, the current mortgage is a standard 5yr ARM, that is amortized over 30 years and fixed initially for 5 years.

The fixed period expires 3.5 years from now, a little after the window for selling the house tax-free, assuming we move out of it. I think I’d rather keep the benefit of the 2.125% annual rate rather than have the hassle of refinancing now. If we do decide not to return to SD, we probably don’t want the hassle of managing a property long-term.

I’m tending now towards selling the house. Some reasons:
– less total hassle
– prices have run up a lot in the last year and competitive current listings seem high-priced and rare to me
– if we sell now, we can stage the house and it will look good; after tenants, it may look much more worn
– if we do return to SD, we may want to be in a different school district.
But we haven’t made a decision yet.

[paramount]

I hear it mentioned often that many who leave so cal/SD frequently return. But honestly, is California really that great?

There’s a reason California refugee’s are told to remove their license plates BEFORE arriving at their next settlement.

[joec]

I think selling now is nice since the tax free gains are guaranteed and it’s hard to know what will happen in the future. Having a large amount of cash in the bank is more flexible.

Lastly, without knowing where your family is, reason for move, why you’d even want to come back here, etc…it’s really going to depend on you and your spouses personal details as to if/why you’d move back to CA.

It’s also hard to put a price on the hassle of having to manage a rental far away.

Another thing for people to consider is that as great as CA is (it’s over-rated unless you are part of the 1% working in an industry that can net you millions/billions I feel and you have to be here), places like TX has no income tax so if you’re high income, saving that 10% could net 20-30k or more a year. Prop taxes are higher, but properties are typically lower in places like TX and NV.

Family/friends are probably also a bigger factor than pure $$ as well.

Knowing people who has left CA, they all seem happy enough and come back whenever they please to visit if they want.

[SD Realtor]

Cantab if you are going to sell my recommendation would be to try to hit the market as soon as possible. The best time to list a home traditionally would be Feb/March.

[Author]

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