Should I sell or should I rent? (fit in, real estate)

[buyingntheburbs]

Let me start by saying I'm not someone under water so this question is different than ones I've seen asked before.

I bought a place about 6 months ago, first time buying a place, I'm in my early 20's. I wanted to take advantage of the 8k and am kind of impulsive so turns out I'm going to be living with my gf and not in the place I bought.

I did a little renovating but still even after that things selling on my block are selling for easily 20k more than I would need to sell for to break even plus most of those arent renovated so mine could potentially sell for more though i do know its a tough market.

My questin is should I sell and walk away with like 10k maybe 20k if I'm lucky or should I rent? In the future I would like to own rental property so part of me says why not get my feet wet and start now. Another part of me is scared of the stories of nightmare tenants, I really can't afford to have someone screw me and winding up having to pay my mortgage plus evict them plus fix anything they damaged.

Looking for advice as to whether I should sell and walk away with a small profit, rent the place myself or rent the place and use a property management companY? Btw, judging from what neighbors have told me they are paying and from what I've seen online I could have my mortgage paid and an extra 200-300 extra.

[chet everett]

Loaction location location ... If you are really sure you could net 10 or 20k my gut says JUMP ON IT!

I've been a landlord in some pretty nice areas, for my tenant's rent to make me 10,000 richer generally takes YEARS, in a rough area it might NEVER happen.

The idea that you could put cash in your pcoket now is tempered by the fact y ou would have to give back the incentive money...

[Philbert]

have you included real estate commission, seller paid closing costs, and repaying the tax credit into your break-even analysis?

does your gf own or does she rent? is it not an option to both live in your newly purchased and upgraded home?

[AuDiBelle]

Yeah, wouldn't you not be able to claim that 8K tax credit if you sell within such a short time?

It sounds like you got a good deal on the property. If you sold (pocketed any cash) and waited for the market to recover (or further bottom out then recover), you may be looking at even higher costs to own the same property. My gut says to keep the property and rent it out yourself. Try doing it on your own, and if it proves too great a hassle, hire a management company.

[middle-aged mom]

As poster " whatyousay" said, you will not be eligible for the tax credit if you resell the property, within 3 years of purchase.

Furthermore, the tax credit is for your primary residence. If you rent the place out and are caught, you will have to repay the tax credit and likely some serious penalties, too.

Even in the strongest of appreciating markets, it is tough to flip at a profit, given the cost to sell. Ask any professional investor. Most places are indeed "underwater" for the first year or two. What was experienced in some places in the first half of the past decade was not normal. Walking away with a profit in a matter of months is anything but normal, especially in this market.

Maybe you want to rethink the whole deal and move your GF into your place.

There is nothing like consequences to cure impulsiveness.

[jamaicabound60565]

Originally Posted by middle-aged mom

As poster " whatyousay" said, you will not be eligible for the tax credit if you resell the property, within 3 years of purchase.

Furthermore, the tax credit is for your primary residence. If you rent the place out and are caught, you will have to repay the tax credit and likely some serious penalties, too.

Even in the strongest of appreciating markets, it is tough to flip at a profit, given the cost to sell. Ask any professional investor. Most places are indeed "underwater" for the first year or two. What was experienced in some places in the first half of the past decade was not normal. Walking away with a profit in a matter of months is anything but normal, especially in this market.

Maybe you want to rethink the whole deal and move your GF into your place.

There is nothing like consequences to cure impulsiveness.

I spoke with a realtor today who said he'd cut me a break on the commission on his side but still keep buyer side so there's an incentive to show the property. He looked at some recently sold places and assuming I can sell for the average after costs I'm still going to walk away with 12k after paying back the gov 8k and everything. If I can walk away with a nice chunk of change I'd be thrilled, if it doesnt sel maybe I'll move my gf in with me.

Whats the deal with taxes? Do they still have the one time not pay capital gains taxes thing? I would like to get into flipping in the future so I'd hate to waste my one time on a small amount of money. If I were to buy something else would I not have to pay taxes? I guess evne if i did have to pay taxes this is the time to do it before the collossal mistake of raising capital gains taxes happens right?