Originally Posted by alittle1
I have two properties:
One is a SFR that I purchased 15 years ago for $40K and has been rented for an average of $8000 a year, taxes are $1200 a year average, insurance $400 average, repairs $500 yearly average. Over 15 years I collected $120K for rent and spent $31500 for expenses. Today's value is $220K.
The other is a commercial property that I bought 30 years ago for $40K and I receive no rent, taxes are $1600 a year average, Insurance is $1000 average, repairs are $0. Expenses are $78000. Today's value is $280K.
If I was to sell both properties today I would pay Capital Gains Tax (CGT) on 50% of the CG at the rate of 37% less expenses which would be Approx. $100K. Gross profit would be $400K.
The question is this:
If you were me, would you tear both properties down, write off 50% of the building face value and spend $750K on re-construction of two new commercial units leasing out for $62K yearly plus an owners apartment above receiving 0 rent.
Or, would you pocket the $400K and head South?
You could always sell your current home that is your primary residence and pay no capital gains, then live in the second home for 1 year and sell it with no capital gains... It would net you around 30k for 1 year of living there.
But really, I know nothing about your age, marital status, financial situation, current job/wage, etc.etc. so I can't really base my opinion on anything.