Do I Sell, Rent or Stay? By Ron Wynn


It’s a big decision knowing what to do. People often sell their homes when they are going through life changes – aging, health issues, divorce, financial reasons.

Many times when people retire, they start to think about how they can live on a comfortable budget. Some of it might mean selling your home to put your money to work for you. Of course, if you’re going to stay in the area, rents are very high and it sometimes just doesn’t pay.

On the other hand, when people own their home free and clear, it is often thought staying put is cheaper than moving anywhere else. That is not entirely true. If you put your money to work for you through a financial planner, you can also offset your expenses. If you are looking to buy again and you don’t take advantage of proposition 60, your taxes are going to be exorbitant, if you are purchasing at a price higher than your selling price.

Some owners sell because they are tired of the traffic and need to get away. Others want to move closer to family. Of course, some people say “our house is jiust too large.” However, lately people have just been shutting off a room and renting them out.

Elective/arbitrary moving has become less and less common. It is just too expensive to pack up and move into a new house. Selling incurs expenses: repairs needing to be made, commissions needing to be paid, and unforeseen things that come up. On the other hand, if you can see yourself moving communities to live where property values are lower, you can buy a beautiful home for a fourth of what you sell your house for, and put the rest of your equity to work with you. Prices are often very affordable to those leaving the Westside of Los Angeles.

If you are married, there is a $500,000 tax deduction for a home that has been your primary residence. Also, if you have lived in your property at least 2 out of the last 5 years, you still qualify for the same deduction. Therefore, you might rent your property for up to 3 years. If your property is a rental property, you can also exchange it for another rental property, but that will not help you in terms of where you will live as your primary residence.

Finally, if you hold your property for your next of kin to inherit, with today’s tax laws, they will more than likely inherit your property tax free unless you have a sizable estate. Be sure to check with your CPA and tax attorney whether these conditions apply. There are many alternatives and options: keep your property, lease your property, or sell your property. Some people prefer “in house” assisted care as an alternative to moving to a “board and care” if they can afford it. This can often be preferable to moving. Feel free to call me to discuss alternatives and possibilities. You have many options to consider. Often, your best option is to Not sell.


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