State Specific Question About: IDAHO (ID)

Since all RE is local, you can answer your own question by putting your duplex on the market and start advertising it. I would skip the realtor and make a serious attempt at FSBO.

I'd sell before the Fed stops quantitative easing and the s*** really hits the fan.

I don't know what quantitative easing is...please explain! Also, this property is in Boise and from the word I get is, the prices are on the up-swing.... I'm not looking to making a killing, I just want to get out in the black. I am a fan of Dave Ramsey and I went to his website and and three of his real estate ELP's contacted me so fast... I was taken back by the frenzy...I just can't decide if I'm ready or not. Just testing the waters!

Watch CNBC religiously.

No houses selling in the Bronx, inventory low since the foreclosures have sold off..

I would do basic maintenance, sell next year, maybe..

Do you think that October/November/December is a good time of year to sell something if you don't absolutely need to? If it was me, I'd wait until spring. Things sell at higher prices when trees aren't bare and there's not two feet of snow over everything. I'd also check with my accountant as to how it would affect my taxes before I planted any signs.

It's easier to turn a profit on something that's paid off vs not paid off.

You aren't going to be a fan of my answer, but here I go anyways:

You apparently didn't do your homework before you purchased your first duplex back in 2005, some 8 years ago. Real estate is a "long term" investment with some "tax" saving qualities. Now that you are going to retire, some of those tax savings aren't going to help you. It takes at least 10 years of owning a small multi-unit property before any profit can be taken and another 10 years before it start to produce incredible profits. Rents sometimes double over a 10 to 15 year period. A mortgage can be paid off in 15 to 20 years. If your timing was right, when you retire rents would be way up and your mortgage would be paid off -- making the duplex a great source of retirement income. You haven't owned it long enough or in the cycle to fit your short term goals.

Now should you sell? What would you do with the money if you did sell? If you held onto the duplex for the next 10 years and worked the property to produce a higher income (through MR. Landlord techniques: IE: higher rent for appliances, bi-monthly rental payments, sublet rooms) -- then at some point the property would give you a nice nest egg. I think you should keep it providing there isn't much deferred maintenance around the corner.

But.. in 2005 who thought real estate would crash?

I'm with Robert on this, although I didn't go into it (was trying to be nice, also brief).

RE over a long term is a good play, sure, but if you purchase something at age 55 and it coincides with all-time "highs" for the RE market, you have to think of potential for downswings.

Quantitative Easing refers to the Federal Reserve's program of purchasing bonds at Treasury Dept auctions in order to keep interest rates low. This translates into lower rates on mortgages, among other things.

If someone will pay X for your house at a low mortgage rate (such as we've seen over the past few yrs), they will lock in relatively lower payments. However, if the paid X for your house at higher rates, they will have relatively higher payments. This is a problem for sellers. Less people will qualify for the mortgage AND for the people that qualify, they'll usually want to get a lower price to offset the higher interest rate that makes their monthly payments higher.

We are still near record lows in terms of interest rates. That can't last. You are also in ID which is a lovely state but it's also a state with lots of buildable land. It's not like a heavily-regulated and densely-populated coastal state where it's super expensive to build new houses. This means that if the housing market gets really hot, builders can add inventory. Compare that to LA or NYC or DC... it's very different and it means housing prices shouldn't boom as much on the upside.

Mean spirited and long posts confuse us older folks.

First, Terry never mentioned a mortgage, maybe he paid cash.

His financial situation seems to be OK..

Also this is the new normal:

Reagan's trickle down economics are long gone.

I don't see any mean spirit. :o)

I was giving an honest opinion trying to put myself in his shoes. He's twice as old (assuming he's retiring at 65) so it's not easy to do. But it needs to be said, if you have only 1 rental house (thus, less experience and less economies of scale) and you're at retirement age, I don't imagine he's going to generate tons of income out of the place no matter what the scenario is.

I've seen people in my real life who get focused on "not losing money on the sale" and then holding onto assets plays out over many years, an eviction here and there, a new roof, replacing a refrigerator, an increase in the insurance and taxes, etc.

Ok,ok! I guess I need to set the record straight here! It seems I've really stirred quite the discussion! First of all, he's really a she (I'm of the female persuasion!), and I've been retired for 6 1/2 years and the property in question is a duplex and I just turned 63!! When I bought the property I was working and had just inherited quite a sizable estate and my goal was to get money out of the stocks and put into real estate and I was looking for tax writeoff. I do have a mortgage on the property. I have never sold investment property before (only primary residences), and I'm learning it's a whole 'nother ball game. I like one of your comments about holding onto the property 10 ten years, etc etc, but I'm not sure I want the responsibility (or as a friend of mine puts it...the intrusion into my life for repairs etc). Another thought is if I had a property manager manage the day-to-day and just send me a check at the end of the month; this would relieve allot of the headaches. But, then again for 6%+ of the gross, I could do it myself...what to do, what to do! Carry on with your comments; I'm taking it all in. I appreciate all of your input...I'm weighing all of my options.

are we having fun?

what a complicated web we weave..

I think you have a rosy picture of how most "property managers", particularly when you are only 1 property and they have dozens to manage. Property managers also usually get a cut of 10% of the rent, which is a big deal because you're already having cuts taken out of rent for taxes, insurance, maintenance, any vacancies, etc.

Terry,

I would polish this rental and sell it.

Enjoy your retirement and your "NEW" LIFE.

DIE BROKE.

The last check should be for your funeral and it should

bounce.

Do not forget about depreciation.

As I understand your post you want to sell for enough that it will cover the RE commission and plus your original down payment. If you have been treating this as an investment property you or your tax preparer have been taking depreciation on this asset. When the property is sold you will have to pay back the depreciation.

As an example if you bought the duplex for $150,000 and then determined that the land alone was worth $25,000 and the improvement i.e., the building was $125,000 you have been claiming about $4400 depreciation per year based on a 28.5 year schedule. You will now have to repay about $39,500 in depreciation.

You could sell your primary residence, no capital gains. Move into the duplex and occupy both sides for 2 years and then sell the property. My understanding is you would not have to repay the depreciation at that point- but I am not a tax pro.

If you have enough to live off of, and this rental is chump change to you, then sell it. Dealing with and paying a PM, or handling things on your own probably isn't worth it. If you need/like the income, then I wold vote to stick with it. You can outsource most everything in terms of maintenance and repair, so no need to listen to your friend in that regard.

I recently sold a property because it was taking away from my precious free time and family life. Seems to be a case by case decision for people. Interestingly enough, I'm doing a 1031 exchange and am looking at buying another duplex in Boise. . Do you mind sharing what section of Boise your duplex is in? If you do get serious about selling, let it be known. I am a genuine buyer at this time. Best wishes.

To A.R. of Idaho...Southeast Boise. If you just sold a place because it was taking up all of your time, why are you looking for another place?

Terry,

Life is short. Do what you want.

If this rental is not giving you what you want, sell it.

I VERY rich man taught me "Make decisions with the information you have TODAY based on your need TODAY.

Do not try to operate a crystal ball.

Make TODAY count and deal with tomorrow tomorrow."

My suggestion is to review this sale with an accountant so you KNOW the numbers.

Also, review your income from this proeprty when you add in the tax shelter.

Nice to see a win/win situation get discussed here.