Property-Sell or Rent

[heightsfan]

Good Afternoon,

hope your week goes well !

I am seeking some input, strategies, experiences, or best practice when dealing with residential properties.

We own 2 older residential homes and we have rented them for years. Approaching retirement age we are considering selling the homes instead of the challenges with being landlords. Is this correct that if we sell the homes and NOT retired yet we shall pay a very hefty tax for income ?

What are some solutions besides retiring early or continue to rent the homes until retirement age then sell the homes?

Last, what are the pro and cons will selling by owner or by realtor ?

Thank you

"make it a great day"

[musicman]

i'll bet selling them during retirement would be better and selling them yourself would be cheaper.

i think one thing i'd consider is maintenance. are you spending lots of money to maintain them? do you like the renters? are they good? just depends on how much you want to take on IMO.

Edited April 18, 2007 by musicman

[TheNiche]

You're asking some pretty open-ended advice. A lot of it depends on what you want your financial position to look like throughout retirement. I'll give you three options:

1) Sell, take a big lump sum up front, and invest or consume it as you see fit. Perhaps you can spot a better investment?

2) Rent indefinitely and leave the homes to your offspring (if any) as an inheritance.

3) Rent indefinitely and reverse-mortgage the equity if you can find an insurance company that'll do that on rental properties.

Me personally, I'd try for the third. If you do decide to sell, I do recommend an FBSO. ...especially if you've got a bit of time on your hands.

[jm1fd]

I'm no tax expert, but I believe you'll have to pay tax on the profits regardless of retirement status.

The only way you can avoid tax on the profits is to live in each one for two years. Might not be a bad option...have it redone, move into it, live there for two years, then sell it and move into the next one.