The real estate market: Most economic prognosticators predict a continuingly healthy real estate market for the foreseeable future. Conservative estimates are that inflation will hold at 2% plus or minus. Investments in real estate, especially financed investments, will benefit from inflation growth. Depending on how we deal with the mounting US debt and worldwide economic influences, this rate could become much higher. Most economists also predict that home prices will continue to escalate as they have for the past two years. In the last two years, some of my real estate investments have experienced better than 40% growth compare to values since the housing bubble burst in 2008.
Financing on either property: In choosing which property to sell, look closely at the financing. If one is free and clear, it might be a great cash-flow opportunity as an investment property. In either case, from a purely economical perspective, it makes sense to be rid of the least favorable mortgage note.
Long-term estate plan: Maybe this would be a strange conversation for a newly wedded or recently engaged couple but if they have a sober understanding of the importance of estate planning, they will not be dissuaded from the discussion. If selling is the solution, problem solved. Just have a plan for investing the equity from the sold property. One idea would be to pay down the principle on the retained house, if it’s financed.
Tax implications to the new couple: What will the combined financial portfolio look like? What level of income will you attain if filing jointly? Does the alternative minimum tax kick in? If so, it could undermine the idea of holding either property as an investment. You would probably lose most of the tax incentive for assuming the investor risk. If you do decide to rent out the property, consider the capital gains benefits of selling before the end of year three, so that you enjoy the benefit of the capital gains tax exclusion.
3 Options Realty is committed to providing Georgia's best property management services. But in the unlikely event that a landlord…
Read More
A dream tenant on move-in day can turn into an eviction case six months later. Missed rent, damage to your property,…
Read More
Are you struggling to maintain multiple rental properties? Have you recently purchased your first real estate investment, but are feeling overwhelmed…
Read More
Most property management companies are designed around the departmental organizational structure. 3 Options Realty is much different and there are…
Read MoreTemperament to be a landlord: If you think renting one of the properties out makes good financial sense, ask yourself if you have the temperament to be a landlord. If not, consider hiring a professional property manager to manage the asset. Doing so will surely cut into your cash flows a little but it could also save you a lot of money and headache. For these same reasons though, this might be best even if you do think you could handle the emotional aspects of being a landlord.
Terri Clair
Cumming, Georgia
Managing Broker
3 Options Realty
678-397-1282
terri@3OptionsRealty.com
The author of this Blog is neither an attorney nor an accountant. Nothing written should be construed as legal advice. Conclusions conveyed are outcomes based upon practical experience and should not be depended upon to be a common outcome of other similar circumstances. Consult with a professional before making tax or legal decisions about real estate in Roswell, Milton, Alpharetta, Johns Creek, Woodstock or any other Georgia municipality.
.webp)
Is a win-win really possible when it comes to rental ownership? Can the owner and tenant simultaneously be happy and satisfied?…
Read More
Do you own rental property? Are the responsibilities overwhelming? If so, hiring a professional property management company can help. At…
Read More
Real estate is intensely competitive, fast-paced, and ever-changing. As a property owner, being on top not only means timely rent collection…
Read More
As a rental property owner, turnovers are expensive. From preparing the property for rental and advertising the vacancy to showing the…
Read More