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Message
Would you sell this home?
Posted on 1/21/26 at 3:53 pm
Posted on 1/21/26 at 3:53 pm
My former primary residence has been a rental for 2.5 years. I left Oxford for another coaching position. The home was bought for $140k and appraises for $320k now. It has a 2.75% interest rate and $711 mortgage. It rents for $1,925/month. It cash flows just fine, but, as I approach the end of the two in five window, the capital gains I would take if I sold later would be in the neighborhood of another $50,000.
It is a win win scenario, but if you were in this scenario, would now be the time to cut loose? I live over four hours from Oxford and have not returned since leaving. I have little ambition of returning and if I did I would prefer a nicer place anyway on the Square.
It is a win win scenario, but if you were in this scenario, would now be the time to cut loose? I live over four hours from Oxford and have not returned since leaving. I have little ambition of returning and if I did I would prefer a nicer place anyway on the Square.
12
Posted on 1/21/26 at 3:59 pm to rpg37
My choice would be to sell. You'll renting that thing for 4 years to pay the capital gains tax by waiting. Less some amount of hopeful appreciation.
Posted on 1/21/26 at 4:42 pm to WhiskeyThrottle
That was our assessment also. Assuming nothing major occurs in repairs. Appreciation there has been incredible which is my one fear of missing out. But, either way, both options are positive.
Posted on 1/21/26 at 6:55 pm to rpg37
How much equity do you have tied up in it that you'd be able to invest elsewhere net of transaction costs depreciation recapture etc?
Do you need/want the income?
How are you coming up w $50k on $180k gain minus improvements, transaction costs, and adding depreciation recapture for 2-3 yrs? Seems high at first glance but maybe including state tax on gain gets it up there.
How much is it cash flowing after all expenses? Whats current ROI?
Do you need/want the income?
How are you coming up w $50k on $180k gain minus improvements, transaction costs, and adding depreciation recapture for 2-3 yrs? Seems high at first glance but maybe including state tax on gain gets it up there.
How much is it cash flowing after all expenses? Whats current ROI?
Posted on 1/21/26 at 7:05 pm to rpg37
I was in a very similar situation a year ago. Kept mine.. but I live in town.
Posted on 1/21/26 at 8:29 pm to TorchtheFlyingTiger
quote:
How much equity do you have tied up in it that you'd be able to invest elsewhere net of transaction costs depreciation recapture etc?
Do you need/want the income?
How are you coming up w $50k on $180k gain minus improvements, transaction costs, and adding depreciation recapture for 2-3 yrs? Seems high at first glance but maybe including state tax on gain gets it up there.
How much is it cash flowing after all expenses? Whats current ROI?
I owe $99k on the home. I may be high, but I was combining federal and state rates. There were a couple large projects that I could deduct that would be about $25k between kitchen and french drain install.
Cash flow is $1,000/month. Last year had a major issue for first time with French drain getting clogged in the middle of heavy storm causing flooding inside the home.
Posted on 1/21/26 at 8:49 pm to rpg37
You could always wait, sell later, then do a 1031 exchange to defer CGs and buy additional properties if that’s something you’re into.
Posted on 1/22/26 at 5:37 am to rpg37
quote:
I left Oxford for another coaching position.
Lane Kiffen posting on the Money Board… whouda thunk
Posted on 1/22/26 at 8:15 am to rpg37
Unless you are local and enjoy doing repairs and property management I'm not a big fan of being a landlord. It can go sideways.
You apparently have an easy out with a nice gain that makes life easier. Seems like a win in every way.
If property management was your primary occupation or stream of income that would be different. But in that case I would think you would try to accumulate between five and a dozen or so properties. That's a legit business but carries risk.
You apparently have an easy out with a nice gain that makes life easier. Seems like a win in every way.
If property management was your primary occupation or stream of income that would be different. But in that case I would think you would try to accumulate between five and a dozen or so properties. That's a legit business but carries risk.
Posted on 1/22/26 at 8:20 am to rpg37
quote:
Cash flow is $1,000/month.
Tough decision, but I think I’d keep it unless I believed serious expenses were on the horizon. What would you do with the gains from selling? It would be tough to give up an appreciating asset that delivered $1k per month.
Posted on 1/22/26 at 10:08 am to FieldEngineer
If I sell, clear just south of $200k, my plan would be to pay off two other properties in full (north of 7% rates) and my car off. This would leave me completely debt free with two paid off rentals, my primary home, and car.
Posted on 1/22/26 at 12:43 pm to rpg37
Im probably selling in that case. Paying off 7% debt and reducing risk across the board (vacancy, repairs etc) and reducing carrying costs. You still have other properties so maintain real estate exposure for portfolio diversification. Overall, just simplifies life and reduces exposure to risk which seems like way to go given it isnt a slam dunk to keep.
Posted on 1/22/26 at 5:47 pm to molsusports
quote:
I'm not a big fan of being a landlord. It can go sideways.
A former neighbor told me a nightmare story about renting his former home to a nice nurse who paid on time and took great care of the place for years ... until she went nuts due to bipolar disorder.
Grass grew, neighbors complained, rent was late several times then went totally unpaid, and when he tried to evict her it led to a crazy lawsuit where she claimed it was "her" house.
Posted on 1/23/26 at 4:48 am to rpg37
quote:Until risks kick in (as an out-of-town landlord) and it isn't.
It is a win win scenario
We went through this decision process last year. We sold.
RE prices are still high in most markets. If they were likely to escalate dramatically from here, it might be a different equation. As others noted, if you miss your Section 121 exclusion window, it will take a while to recoup the difference in rental revenue.
I'd sell; avoid landlord headaches, avoid the upkeep costs, avoid the cap gains, and apply the profits elsewhere.
Posted on 1/23/26 at 9:00 am to rpg37
quote:
I left Oxford for another coaching position
Sell now and do Cane's commercials to pay off the capital gains tax.
Posted on 1/23/26 at 9:31 am to rpg37
Some of your responses appear to be from folks that aren't interested in owning rentals. Their opinions might not be as relevant.
You have had nice appreciation. What is the outlook for the Oxford real estate market? If it is still in a growth trend, you could project future appreciation. Your cash flow is solid and is an argument to keep. The $50k difference you mention sounds high. Do you have a tax guy that can help you determine if this number is accurate?
Sounds like a win-win. Hard to give up the low mortgage rate on this property, but eliminating the 7% mortgages on the other properties is appealing. As others mentioned, you always have a 1031 option down the road, but not sure if you are planning to add more rentals.
What is your long game? Are you staying in the rental market?
These decisions often come down to what you will do with the proceeds, but the numbers show this one is a good investment to keep. Roof and HVAC needs could factor in. Those are usually my biggest hits on expenses. I accept them as cost of doing business on long range properties, but consider it on anything I may not be planning to keep long term.
I wouldn't criticize either decision. You are being thoughtful about it. Congrats on your win-win situation.
You have had nice appreciation. What is the outlook for the Oxford real estate market? If it is still in a growth trend, you could project future appreciation. Your cash flow is solid and is an argument to keep. The $50k difference you mention sounds high. Do you have a tax guy that can help you determine if this number is accurate?
Sounds like a win-win. Hard to give up the low mortgage rate on this property, but eliminating the 7% mortgages on the other properties is appealing. As others mentioned, you always have a 1031 option down the road, but not sure if you are planning to add more rentals.
What is your long game? Are you staying in the rental market?
These decisions often come down to what you will do with the proceeds, but the numbers show this one is a good investment to keep. Roof and HVAC needs could factor in. Those are usually my biggest hits on expenses. I accept them as cost of doing business on long range properties, but consider it on anything I may not be planning to keep long term.
I wouldn't criticize either decision. You are being thoughtful about it. Congrats on your win-win situation.
Posted on 1/23/26 at 9:35 am to KWL85
The current HVAC system has been replaced once in my 10 years of ownership. Probably somewhere around 2018. So, it's coming. The roof has never been replaced since it's built in 2009. The French drain is a concern because of the slope of the backyard from a high peak that brings sediment, sand, and debris everytime it rains had. My largest issue is the maintenance and not being there.
Appreciation in Oxford has been wild the past ten years. It's cooling down some now, but will still likely see 5% in each of the next few years.
Appreciation in Oxford has been wild the past ten years. It's cooling down some now, but will still likely see 5% in each of the next few years.
Posted on 1/23/26 at 12:00 pm to rpg37
quote:
It has a 2.75% interest rate
That’s free money. Keep that asset as long as possible.
Posted on 1/23/26 at 12:55 pm to rpg37
quote:
If I sell, clear just south of $200k, my plan would be to pay off two other properties in full (north of 7% rates) and my car off. This would leave me completely debt free with two paid off rentals, my primary home, and car.
Until you posted this, I was heavily leaning to keep the property. Do you have a PM in Oxford and is your $1k NET including that or who takes care of issues if you don't have a PM? If you're the "PM" and/or relying on friends, I'm leaning to sell with this new info.
Where are your 2 other rentals, close to you? It is hard to give up an appreciating asset with a low rate like that. I have a condo that I am back and forth on selling. 2.49% about $100k left just like you. I'm just tired of dealing with HOA's nonsense and a little tired of being a landlord on a different island than I live. But, I keep saying to myself I have a property in Hawaii that will always be worth more. Then I say to myself, I can drop $400k+ in the market and likely do better without the headaches...
Posted on 1/23/26 at 1:03 pm to Sho Nuff
I live on the coast now and the other rentals I refer to are local to me. Moving from Oxford to Ocean Springs/Biloxi.
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