Condo – sell or rent out?

[(former)FormerSanDiegan]

Before a reset, my carrying costs are 600/mo post tax implications. Plus whatever it costs me to live somewhere else if I rent this place out.

I’m just looking at the impact over the next 3 years before the reset- not to imply that I would sell in 3 years, but I’m trying to get a financial picture before and after the reset. Once it resets, we’re talking about a bump from $1700/mo to $2400/month in cash out.

Got it.

Seems like if you can rent a place in your new town for $1100 per month it is essentially a wash in the short run.

Now it just boils down to whether you want to toss away 70K now, or cross your fingers and either toss away 100K 3 years from now or break even maybe a decade or more from now, or something in between.

Moving to the new town/job likely means a bump in pay and more up-side. Whatever you do, don’t make the career choice based on your housing situation.

[(former)FormerSanDiegan]

And not to jump onto the marriage tax issue – but it does sound like if I ever get married my tax benefits from write-offs get killed by the additional income. sounds like a reason not to get married!
Maybe. Maybe not. At higher income, you may be in higher tax brackets, and the write-offs become more valuable, that is until you start crossing various income thresholds (e.g. approaching 150K) and various other phase outs of deductions and phase-in of AMT. Taxes are way too complex. The complications make it difficult to do what-if scenarios.

[(former)FormerSanDiegan]

And not to jump onto the marriage tax issue – but it does sound like if I ever get married my tax benefits from write-offs get killed by the additional income. sounds like a reason not to get married!
Maybe. Maybe not. At higher income, you may be in higher tax brackets, and the write-offs become more valuable, that is until you start crossing various income thresholds (e.g. approaching 150K) and various other phase outs of deductions and phase-in of AMT. Taxes are way too complex. The complications make it difficult to do what-if scenarios.

[(former)FormerSanDiegan]

And not to jump onto the marriage tax issue – but it does sound like if I ever get married my tax benefits from write-offs get killed by the additional income. sounds like a reason not to get married!
Maybe. Maybe not. At higher income, you may be in higher tax brackets, and the write-offs become more valuable, that is until you start crossing various income thresholds (e.g. approaching 150K) and various other phase outs of deductions and phase-in of AMT. Taxes are way too complex. The complications make it difficult to do what-if scenarios.

[2008]

In my current situation, marriage and the combined income would definitely push me into AMT. My better half is already subject to AMT

[2008]

In my current situation, marriage and the combined income would definitely push me into AMT. My better half is already subject to AMT

[2008]

In my current situation, marriage and the combined income would definitely push me into AMT. My better half is already subject to AMT

[SD Realtor]

For all I would be really careful about tax advice. In general I find that FSD seems to give the best advice out there with regards to taxes with rental/income properties. I have yet to see where his advice is not correct. Still with that said, check with a CPA. As far as the 25k loss ceiling lifted if you are a real estate professional be VERY VERY careful with that one.

SD Realtor

[SD Realtor]

For all I would be really careful about tax advice. In general I find that FSD seems to give the best advice out there with regards to taxes with rental/income properties. I have yet to see where his advice is not correct. Still with that said, check with a CPA. As far as the 25k loss ceiling lifted if you are a real estate professional be VERY VERY careful with that one.

SD Realtor

[SD Realtor]

For all I would be really careful about tax advice. In general I find that FSD seems to give the best advice out there with regards to taxes with rental/income properties. I have yet to see where his advice is not correct. Still with that said, check with a CPA. As far as the 25k loss ceiling lifted if you are a real estate professional be VERY VERY careful with that one.

SD Realtor

[Anonymous]

Just want to say thanks, especially Ray & SD Realtor for all the information.

I think the wife and I are gonna just sit tight as long as we can and save money. With our 4.5% CHFA, we can save about 2,800 a month with our lifestyle. If I do look into selling, I’ll try to sell with the assumable loan. It might be worth visiting a CPA just to see our options with renting, tax etc.

Ive started compiling everything into Numbers (Macs spreadsheet app), thanks for the advice.

One more question. I got my tax bill in the mail today. CHFA has escrow account built into mortgage payment so I dont have to pay, but on the bill it lists the total L&I (land and improvements) at 286k. This seems like a shady move by the city of SD if the property isnt worth this. Is this something I should be concerned about, or just part of life?

[Anonymous]

Just want to say thanks, especially Ray & SD Realtor for all the information.

I think the wife and I are gonna just sit tight as long as we can and save money. With our 4.5% CHFA, we can save about 2,800 a month with our lifestyle. If I do look into selling, I’ll try to sell with the assumable loan. It might be worth visiting a CPA just to see our options with renting, tax etc.

Ive started compiling everything into Numbers (Macs spreadsheet app), thanks for the advice.

One more question. I got my tax bill in the mail today. CHFA has escrow account built into mortgage payment so I dont have to pay, but on the bill it lists the total L&I (land and improvements) at 286k. This seems like a shady move by the city of SD if the property isnt worth this. Is this something I should be concerned about, or just part of life?

[Anonymous]

Just want to say thanks, especially Ray & SD Realtor for all the information.

I think the wife and I are gonna just sit tight as long as we can and save money. With our 4.5% CHFA, we can save about 2,800 a month with our lifestyle. If I do look into selling, I’ll try to sell with the assumable loan. It might be worth visiting a CPA just to see our options with renting, tax etc.

Ive started compiling everything into Numbers (Macs spreadsheet app), thanks for the advice.

One more question. I got my tax bill in the mail today. CHFA has escrow account built into mortgage payment so I dont have to pay, but on the bill it lists the total L&I (land and improvements) at 286k. This seems like a shady move by the city of SD if the property isnt worth this. Is this something I should be concerned about, or just part of life?

[ocean]

ocean…..Having been in your situation in the early 90’s,I can understand your concerns.I do have to agree with porkman on this.Is a short sale a possibility?If not ,I would bite the bullet now,clean up the place and send the keys to the lien holder.One ding on your credit isnt the worst thing in life.You should be able to get another loan,a well written letter of explanation,and a meeting with the right lender does wonders.I even had lenders tell me that they had more respect for the individuals that realized they made a bad investment and decided to move on.I was able to get new loans,at market rates,but did have to pay 20% down.It did take 7 years to drop off my credit,and now the fico is 816.Throwing good $$$ after bad makes no sense to me. I learned a lot from my experiences,and now have NO debt.Just something to think about.I’m NOT suggesting to follow this couse of action,but do realize to aren’t alone,and certainly no lesser of a person because you made a bad investment.

[ocean]

ocean…..Having been in your situation in the early 90’s,I can understand your concerns.I do have to agree with porkman on this.Is a short sale a possibility?If not ,I would bite the bullet now,clean up the place and send the keys to the lien holder.One ding on your credit isnt the worst thing in life.You should be able to get another loan,a well written letter of explanation,and a meeting with the right lender does wonders.I even had lenders tell me that they had more respect for the individuals that realized they made a bad investment and decided to move on.I was able to get new loans,at market rates,but did have to pay 20% down.It did take 7 years to drop off my credit,and now the fico is 816.Throwing good $$$ after bad makes no sense to me. I learned a lot from my experiences,and now have NO debt.Just something to think about.I’m NOT suggesting to follow this couse of action,but do realize to aren’t alone,and certainly no lesser of a person because you made a bad investment.

[Author]

Posts