Profile picture for user091456

Need advice on renting or selling our home.

We bought our home a year ago through a short sale for a really good price.  My husband is now applying for a job out of state, and he could start as early as Jan 2013.  (That would put us living in our home for 1 1/2 years)  We are debating on whether or not to rent our home.  We plan on buying a new house near his new job after he gets off probation, which is a year.  Would it be worth it to rent our current home for a year and then sell it, or should we just try to sell if before we move?  Currently Zillow has our home valued at about $10,000 more than what we purchased it.  Will the taxes be ridiculous if we sell it after renting it for a year? 

We wouldn't mind holding onto the property for a while as a rental, but I am not sure how easy it is to buy a new home if you already have an existing mortgage, even if it is a rental. 

Any advice and comments will be greatly appreciated!  Thanks!
  • September 02 2012 - US
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Answers (2)

Profile picture for wetdawgs
this is a decision you have to make for yourselves.

Some things to consider:

Renting from a distance is painful, unless you hire a property manager at approx 10% of the rent.

Capital gains when you've lived there ~ 1.5 years - remember this is gains on your cost basis, and selling can easily be 6 to 10% of the selling price.  So, in a simple minded calculation cost basis would be purchase price plus the selling costs.    (Simple minded because I'm assuming no capital improvements since you purchased it).  Please talk with your accountant for sure.

  • September 02 2012
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Profile picture for fb462827053
You are making quite a few assumptions there. One he has to GET the job, and keep the job.  You will both  need to like the area if you plan on purchasing there and you are assuming that the zillow estimate is accurate, and will continue to be so.
My advice is slow down. While planning your life out is always good, take it one step at a time. Once he gets the job, then see if the cost of selling is worthwhile vs the cost of property management. Compare the rent in the new city to the cost of purchasing a home, and determine the short and long term expenses of holding two homes. You would need to speak with a mortgage lender, as well, if you plan on holding two homes you may not qualify, especially as you won't have established a long term renter.  The cost to sell your home will likely eat up any expected profit, and you may not end up ahead.

Good luck. 
  • September 02 2012
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