Sell house or rent it?
Should my wife and I sell the house we are downsizing out of and invest the money in the stock market or keep the house and rent it out? We have no mortgage on the house we live in or on the house we are moving into. We own both. No credit card debt, no car loan. We are income secure with defined benefit pensions and 2 maxed out social security benefits we claimed at full retirement age. We have 401 K’s that are about equal to the value of the big house. Our home has appreciated about 5% a year for 32 years. We do not need income to maintain our current standard of living. We have been landlords in the past and the small house is about 2 blocks away from where we live now. The rent would cover the taxes, insurance, and repairs on both buildings annually. We are risk adverse but we have committed to staying in the stock market for the next 10 years. Sell or rent? Thanks.
Terry Says
Tough choice. YOu’ve covered all the bases — both financial and re being a landlord.
So I guess it comes down to which investment you think will perform better over the next 10 years– stocks or houses!!
By the way,, if you sell it is as your primary residence, you and your spouse each get a $250,000 exemption on capital gains taxes (presuming you bought it long ago and at a lower price). But if it is a rental property, your cost basis is your original cost and you will pay taxes on the gains. That might figure into your decision.
