Should I rent, sell or stay?

(background) My husband and I bought a home in NY, nice suburban area. We took a year to fix it up ourselves and it came out beautiful. (Our jobs as Realtor and Mortgage broker allow us the flexibility time wise). It is now worth over $1mm, we did try to sell and rent it. We had an offer for over $1mm (just over), but we were advised by my dad (a RE investor) not to sell, but to rent instead. Plus, we wouldnt be making enough profit for all the $$ and hard work we put into it. I was an accounting major in college, and knew that since we held onto it for 1 year as our primary, we could rent it for a few years, and have it be our primary for 1 additional year (havent figured out exactly how but thats not the point), and we still have tax savings (2:5 years primary to avoid long term gains tax). Long story short, we rented it for a LOT to cover our large mortgage. GREAT tennants, pay rent early- all is well!!! That investment is a long term investment, b/c we know the area has never done anything but appreciate in even the worst market.

Property #2: We bought a condo nearby in NY. We got a good deal on it, spent 1-2 months fixing it up- its beautiful now and worth much more. Its the most desireable in the complex (we know all about it here as weve been looking here for 3 years for a good deal) We now live in the condo, and just found out that the town is considering OK’ing a additional 46 units to be built here. We dont know what to do now… We were somewhat aware of this information when we bought, but for some reason werent swayed. Now, the plan was to live here for a few years and then rent or sell. BUT- we are afraid that if we wait a few years, or even 1 year, the new condos will hurt our value. Its hard to say what they will do. Supposedly, the common charges will decrease. BUT- all the existing units are from 1980’s-90’s. (ours is one of the newest, and now after the renovations- nicest - and most private/townhouse style not a stackable like the neighbors ). But the new ones will be considerably newer, and we are worried it will still hurt the saleability or rentability. There are currently like 25 units for sale in our complex right now- a LOT - we think people are running for the hills b/c of the new development. They are moving, slowly, and most are not like ours (we are in the Biz and know a good buy when we see it…)

SO- we ran test ads for rent and sale. I literally only ran 1 ad with NO pics on Craigslist. 1 ad- OK- i have been flooded w/ emails and inquries. ??? We have it for a high rent, we would be making $1000/mo after expenses. But, is it still a risk then to hold it with the information we know about the new units coming in? Or do we try to lock in a good lease and forget it? Or do we just stay here and enjoy it and forget anything else?

If we rent or sell, we have to find soemthing else, and were not 100% sure if we can get a 3rd mortgage, b/c we are in the business, and lender guidelines are strict for those in the Biz. Im sure we coudl do it, and pull a down payment from a Heloc on another ppty etc- and continue building our net worth… and we are young, and have no kids yet. We figure w/in 5-8 years we will sell most of what we have and buy something nice for ourselves, (but who knows what will happen in that time period…lol…)

Thanks for ANY input- i know this is long, but had to paint the full picture. We are an odd couple i know but we love this life!

ps- just want to add my husband and I have someone who is coming to check out our condo, which if they buy- we will make $100k on w/in 3 months (after expenses, well net around 50k profit). Should we go for it?? Or hold it? I know we can also rent it, and make at least $1000mo, but think if we dont sell it now, well be stuck w/ renting for a few years- possibly 5+… Thanks for insight :slight_smile:

In general I keep my business decisions and my personal decisions separate. You have to live somewhere and if your condo is good for you why not stay. I determine where I am going to live as a matter of lifestyle. I invest in real estate so that I can afford my lifestyle. If my lifestyle means hat I live in my condo, then I would buy another condo and sell it to fund my lifestyle.

For example, I live here in Houston in a 3000 sqft house with a pool and home theater. I can sell it and after expenses net about $115k. This is based on the houses like mine that have sold in the last month on my same street. But that is why I buy these trash houses to make $10k here and $20k there that enables me to live this lifestyle. It is not about the money it is about the lifestyle. Why do you want the money? You want the money to live a certain way. If you want the money for money’s sake then you are a miser.

Just this week I did run across a 7000sqft house in my neighborhood that if I sell my house and use the money from that sell to put a $100k down payment would make the payments really nice.

Thanks for the answer. My husband and I do not want the condo lifestyle forever- if in fact we could afford a nicer house (home theater etc- nice :slight_smile: we would definately jump at it. However, in this area (dont know about you/yours) that means spending millions, our condo is worth $399k, and if we sold, would probobly have to buy another fixer upper to maintain living in this area for around $700k house (definately would be fixer upper). But- we would make 100k in 2-3 months! So, we could put that down on a house.

So- as far as my husband feels- a condo is just a place to live. I just want to have a place to live, settle down for more then 5 minutes before we up & leave.

But- thank you for that. My husband and I appreciated it, and i know all areas are different and its really hard to live here unless you are CEO of a major Co in NYC or such, but our family is here, and lifestyle is always soemthing to consider. Especially once we have kiddies w/ in a few years or so.

Thanks :slight_smile:

Big home theater rooms are very impressive.

For $399k you can get a 3000 to 4000 sqft house on the lake. My point is why would a person live someplace that does not afford the lifestyle they are trying to have? People always talk bad about get rich quick. But I contend that there is only one way to get rich and that is quick. The alternative is to wait and save your pennies until one day you are rich and old. Wealth is wasted on the old. You need to live the lifestyle you want to live as soon as you can.

Money is like a ball game. There is offense and defense. Offense is how much money you can make. Defense is the spending side of the equation. Your lifestyle is the scoreboard. If you made a lot of money do a big offense, but after you spend the money you can afford and you still don’t have the lifestyle you want then you are losing the game. Remember that it costs the same to be poor everywhere in the USA. You can find ground beef on sale for 89 cents a pound, 10 pound bags of rice for a dollar, and some kind of place to live for $300/month in every city in the USA. But you need to ask yourself. Where is it cheap to be rich? Then you move there. You see money is not the same everywhere. $100k in NYC is NYC money. It buys you what you can buy in NYC. It is not the same as Houston or Nashville money. If you are staying in a high cost area because you make a high salary, compare it to the salary and lifestyle cost in another market. You will find that they are not paying you that much more to live there doing the same job as they pay here.

I was living in Virginia and realized that I could not afford the lifestyle that I wanted to live if I stayed there. I looked around the country and found where I could have the lifestyle I wanted in a reasonable amount of time and moved here. People are not plants, we can move. Remember it not about the money it is about the lifestyle.