Renting out our American Home

justforfun87 ↓

Yesterday at 6:09 am

I am looking to speak to people who moved to Israel and kept their home in America for a few years. How did it work out for you? Is it best to just cut ties and sell? Can we rent out our home if it needs a lot of work cosmetically?

Our mortgage is appx 1650 and rentals are going for appx 2500-3k depending on condition so we will be making money Gd willing.

amother

Orchid

Yesterday at 6:12 am

As long as you have a contact who is willing to help you out, its relatively simple. You do need luck getting good tenements but thats always the case. If you sign a five year lease with good tenants then you should not expect any issues. But do have someone designated to assist with any emergencies like the boiler or HVAC having issues etc.

↑ justforfun87 ↓

Yesterday at 6:21 am

amother Orchid wrote:

Do we need to upgrade the house or are people willing to rent as is?

amother

Outerspace

Yesterday at 6:23 am

We cut our ties but people do both. The question to we were told to ask ourselves is if the house sits empty for a period, can you take the loss?

Chayalle ↓

Yesterday at 6:53 am

justforfun87 wrote:

Do we need to upgrade the house or are people willing to rent as is?

It probably depends on just what upgrades are needed, how much you want to rent it for, and what the demand is in the area it's in.

amother

Trillium

Yesterday at 6:58 am

What kind of condition are you talking about?
There’s a big difference between kitchen cabinets that don’t close and moldy grout in the bathrooms to just old style but very clean and good condition.
If the former, you need to make it better if you want to rent it.

↑ justforfun87 ↓

Yesterday at 7:45 am

amother Trillium wrote:

Maybe a combination of the two. Kitchen is fine, bathrooms needs work.

amother

Apricot

Yesterday at 7:51 am

justforfun87 wrote:

Maybe a combination of the two. Kitchen is fine, bathrooms needs work.

If it's livable (are youbliving there now?) Then you can price it accordingly.

If it can use upgrades that you're not doing then the price will have to be somewhat lower.

↑ Chayalle

Yesterday at 8:23 am

justforfun87 wrote:

Maybe a combination of the two. Kitchen is fine, bathrooms needs work.

Perhaps you can work something out with a tenant whereby you give them either a cheaper rent, or a discount and they take care of fixing the bathrooms.

amother

Indigo ↓

Yesterday at 8:28 am

My husband and I are in a similar situation with our house. We definitely need to redo one of the bathrooms before we go but can't decide if we should sell it or rent it out. If we rent it then we need to pay someone to take care of all the maintenance issues that come up and if we don't have a tenant than we have to pay the mortgage ourselves and our rent on our place in Israel.

I like the idea of getting a long term tenant for say 5 years and then selling it that way we pay more of our mortgage off before selling it.

sweetpotato ↓

Yesterday at 8:35 am

amother Indigo wrote:

I like the idea of getting a long term tenant for say 5 years and then selling it that way we pay more of our mortgage off before selling it.

Just be aware that this can subject you to capital gains tax on the sale of the house. The amount you could owe in tax could cancel out the extra equity. (If you’ve lived in your house for 2 of the past 5 years before selling, you don’t have to pay capital gains tax).

↑ justforfun87

Yesterday at 8:42 am

sweetpotato wrote:

Right, so we would sell within 3 years. So really it is an option to rent only for the first 2-3 years.

amother

↑ Indigo

Yesterday at 8:46 am

So is it worth it to only rent it for 2 years? How much of the mortgage is that really helping to pay off vs the money you can have right away by selling the house?

amother

Mocha

Yesterday at 10:01 am

sweetpotato wrote:

You don’t pay capital gains tax for gains less than $500,000 for married ($250,000 for single)

↑ sweetpotato

Yesterday at 10:18 am

amother Mocha wrote:

You don’t pay capital gains tax for gains less than $500,000 for married ($250,000 for single)

Correct— if it was your primary residence and you lived there for at least two of the past five years before selling. Once you move out/convert to rental, the capital gains exclusion won’t apply. It’s complicated so anyone considering holding onto a former home to rent it and sell later should talk to an accountant to make sure that their strategy makes sense.

https://www.nerdwallet.com/art.....sion?