I have my 4 rentals (on one city lot) dropped to $775,000 at the end of May; the market is flattening; still getting viewers, but not very many.
I had a required appraisal that raised my base up to 739,000 based on 2021 sales because, at the time, in April, there were no multi rental properties recently sold.
I had one offer of $700,000 asking me to take back a $200,000 loan for 6% interest.
Now I can lower my price to $750K which would net $712,500 after realtor fees of 5%, $37,500, if it sold at that price. I can also wait this out at the current price until my contract with the realtor is finished; wait two months; contact the original person who offered $700 K and accept that offer because there will be no realtor fee in December.
So, what should I do right now? It seems to me that those two scenarios are equal except for possible capital gains taxes. I will pay them if I sell at a price over $739K, I think… My question is: Do I pay capital gains taxes on the amount of the sale or on the net amount received. If it is the net amount received, then I would not pay capital gains taxes. That makes a difference to my bottom line.
Thanks for your input, Anne
My question is: Do I pay capital gains taxes on the amount of the sale or on the net amount received. If it is the net amount received, then I would not pay capital gains taxes. That makes a difference to my bottom line.
As answered in the thread on the other board - neither. I suggested over there, and will suggest again here - you need to read IRS Pub 523 https://www.irs.gov/pub/irs-pdf/p523.pdf in order to figure out what your gain is, and then to see how you will be taxed since some of the gain (the recaptured depreciation) will be taxed at ordinary income rates, rather than capital gains rates.
We sold our rental in April. Was a little under ask, about 3%, and I was disgruntled after a home inspection that was done in bad faith, IMO. Considered keeping it on the market but in the end chose to sell. They were dealing with the last month of the rental, (and of course keeping the rent,) so that was one less worry in selling.
Tenants moved out end of May. June 1 a tree fell on the house. They repaired it, and the sewer backed up into the garage. We would have been insured for all of that, but the hassles would have been too much. Lowering work was a big motivator in selling in the first place, since the rental brought in good money.
We had been fortunate in that nothing major went wrong in the 5 years we owned the property. My gut was telling me it was time to unload. All the systems and appliances are aging. What will go next?
still on the neighborhood Facebook page and sees all the adventures the house is going through