Rent Primary Residence?

I have a monthly $2300 mortgage ($1300 principal + $1000 interets and taxes) on my primary residence. I'm going to move to another neighboring town and would like to rent my existing house for about 3 years.

My intention is to continue to pay the low interest (3.875%) mortgage for now. Also, I would not like to lose the capital gain tax savings on the equity in this house.

Question: Sell now or rent. Any ideas?

Comments(6)

  • jfoley24th March, 2004

    How long have you been in your current residence?

  • KvTwrs25th March, 2004

    Lived here for 7 years and I have a lot of equity (300K) in this house. I'm the only owner and the house is in great shape - central air etc.

  • lassitermarketing25th March, 2004

    Are you planning on buying a house in the new town? Do you plan to move back to your house at some point? I always vote to keep the house if the rent covers the mortgage. Negative rent can hurt you. And you've lived in it for at least 2 of the last five years so the IRS will be fine when you sell.

  • KvTwrs25th March, 2004

    Do not plan on coming back to this house because we're buying in the neighboring town.

    Also, shouldn't I be able to rent it for 3 years and still get the tax benefit? (ideally find renter who may consider buying it).

    If I sell it now, I also have the option of reinvesting in another property.

  • jfoley29th March, 2004

    You'll still get the tax advantage for being in there 2 years even if you rent it now. If you've been in the house 7 years more than likely it has appreciated and therefore you could rent at the new appreciated value while having a mortgage based on the original purchase price. This gives you the possibilty of renting at or below market value and possibly make money off the rent. However, YOUR market will dictate what you can rent it out for. You could even take a loss on the monthly rent to get the 1-3 years of additional appreciation as long as you make money.

  • j_owley29th March, 2004

    looks like a very large rent payment from what you have described, will you find a tenant for that sum?

    also in my area they are talking about some deflation in the housing market, is that a possiblity in yours? If so keep that in mind!

    John wink

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