Good question from a reader going by the name “Mr. Ed” in the comments on yesterday’s post:
Here’s a real-life question for you all. My wife and I are closing on a house soon. It’s a house of the sort we always wanted, we intend to live there for 15-20 years, and we recognize the risk of further value declines. But I’m not asking about that.
My question is about the house we live in now — a sweet (if I may say so myself) updated three bedroom rambler in the burbs. We bought it in 1999 and after a lot of work paid it off this year. We briefly put the rambler on the market last year (during the tax credit craze) and got an offer we would have accepted, but we rejected it and took the house off the market because of family reasons that made it impossible for us to move.
So the question now: Should we try to sell the rambler now in hopes of being one of the few nice houses on the market and maybe provoking a bidding war? Or should we rent the rambler now and hold it for a few more years? Thoughts?
Personally I would suggest that if you don’t want to hold onto the home for the long term, selling it now is better than holding it for a few years and attempting to sell it later. The chance that home prices will be higher just a few years from how is slim to none. Meanwhile, you’ll have the added responsibility of being a landlord.
Also, as Kary points out, the tax ramifications of selling a rental property are not as favorable as selling a primary residence.
I definitely recommend selling now. What about the rest of our readers? What other factors should “Mr. Ed” consider?