Rent or Sell?

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If my memory serves correctly, I believe he is renting out his 4 BR detached condo in Woodbury East (between Irvine Bld, Trabuco, Sand Canyon and 133), and really close to the community park.

and this is the floorplanhttp://kbhome.blu-plan.com/plan/residence-two_4


brergnat said:
scubasteve said:
We just signed a contract for a new home and have been wondering what to do with our current home. We have about  300k in equity right now. Our original plan was to just rent it out and keep the home forever.

However, I'm not so sure if it's the smartest thing financially. We will probably break even or maybe we get lucky and make 1% return per year on our original investment after the mortgage , taxes, mello roos, HOA , and insurance are accounted for.

Should I consider selling to take advantage of getting my gains out tax free or just hold and have someone pay off my house.  I was originally planning on holding and treating the house as a savings fund for my sons future college tuition. Thoughts?
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What neighborhood is your home in? We are a family looking for a rental home in Irvine, for July 1.

We are model tenants. Been in our current home 4 years and our landlords are sad we have to leave. Looking to stay in our new place 2-5 years. Job is VERY secure...we aren't going anywhere for at least 2 years.

Hit me up if you decide to rent out your home.
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The California Court Company said:
If my memory serves correctly, I believe he is renting out his 4 BR detached condo in Woodbury East (between Irvine Bld, Trabuco, Sand Canyon and 133), and really close to the community park.

and this is the floorplanhttp://kbhome.blu-plan.com/plan/residence-two_4


brergnat said:
scubasteve said:
We just signed a contract for a new home and have been wondering what to do with our current home. We have about  300k in equity right now. Our original plan was to just rent it out and keep the home forever.

However, I'm not so sure if it's the smartest thing financially. We will probably break even or maybe we get lucky and make 1% return per year on our original investment after the mortgage , taxes, mello roos, HOA , and insurance are accounted for.

Should I consider selling to take advantage of getting my gains out tax free or just hold and have someone pay off my house.  I was originally planning on holding and treating the house as a savings fund for my sons future college tuition. Thoughts?
Click to expand...

What neighborhood is your home in? We are a family looking for a rental home in Irvine, for July 1.

We are model tenants. Been in our current home 4 years and our landlords are sad we have to leave. Looking to stay in our new place 2-5 years. Job is VERY secure...we aren't going anywhere for at least 2 years.

Hit me up if you decide to rent out your home.
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I hope I don't owe you a 2.5% fee for being my virtual agent =)
 
gasman said:
+1 on umbrella insurance.  Gotta have it once you have any real assets.
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What is umbrella insurance?  Is that the same as "landlord" insurance that covers broken pipes, water damage, liability issues etc.? 
 
eqly said:
What is umbrella insurance?  Is that the same as "landlord" insurance that covers broken pipes, water damage, liability issues etc.?
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Covers damages to your shoes, watch, clothes, etc if you forget your umbrella on a rainy day.
 
+1 for umbrella insurance.  some of my friends even put the rental in the LLC so that personal assets can't be touched.  that seems a bit much considering its $800 a year in fees plus additional costs during tax time. 

umbrella policies usually give a discount on car so total out of pocket should be $250-500 a year depending on $1M or $2M coverage. 
 
rkp said:
+1 for umbrella insurance.  some of my friends even put the rental in the LLC so that personal assets can't be touched.  that seems a bit much considering its $800 a year in fees plus additional costs during tax time. 

umbrella policies usually give a discount on car so total out of pocket should be $250-500 a year depending on $1M or $2M coverage.
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Is umbrella insurance and LLC for each rental considered overkill?
 
SubSolar said:
rkp said:
+1 for umbrella insurance.  some of my friends even put the rental in the LLC so that personal assets can't be touched.  that seems a bit much considering its $800 a year in fees plus additional costs during tax time. 

umbrella policies usually give a discount on car so total out of pocket should be $250-500 a year depending on $1M or $2M coverage.
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Is umbrella insurance and LLC for each rental considered overkill?
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umbrella is 1 policy and not per rental.  it covers everything you own. 

if you only have 1 rental property and already doing umbrella, i personally think LLC is a bit much.  however if you plan on having many rental properties, it might not be a bad idea.  some of my friends have it setup where all of their rentals are under 1 LLC.  that seems to make more sense and while they risk losing all of the rentals, the loss is limited to that and nothing outside of the rentals.
 
rkp said:
SubSolar said:
rkp said:
+1 for umbrella insurance.  some of my friends even put the rental in the LLC so that personal assets can't be touched.  that seems a bit much considering its $800 a year in fees plus additional costs during tax time. 

umbrella policies usually give a discount on car so total out of pocket should be $250-500 a year depending on $1M or $2M coverage.
Click to expand...

Is umbrella insurance and LLC for each rental considered overkill?
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umbrella is 1 policy and not per rental.  it covers everything you own. 

if you only have 1 rental property and already doing umbrella, i personally think LLC is a bit much.  however if you plan on having many rental properties, it might not be a bad idea.  some of my friends have it setup where all of their rentals are under 1 LLC.  that seems to make more sense and while they risk losing all of the rentals, the loss is limited to that and nothing outside of the rentals.
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If you have multiple rental policies, can't you just increase the umbrella policy to a higher limit rather than LLC'ing each one?
 
Umbrella insurance only covers your regular insurance covers.  For example, if your regular insurance does not dog bite, then your umbrella insurance will not cover dog bite either.  There are always hidden risks to become a landlord.  if some accidents happens and you are NOT covered by your insurance, then you can lose EVERYTHING.
 
that's where the llc comes in?

yaliu07 said:
Umbrella insurance only covers your regular insurance covers.  For example, if your regular insurance does not dog bite, then your umbrella insurance will not cover dog bite either.  There are always hidden risks to become a landlord.  if some accidents happens and you are NOT covered by your insurance, then you can lose EVERYTHING.
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The California Court Company said:
that's where the llc comes in?

yaliu07 said:
Umbrella insurance only covers your regular insurance covers.  For example, if your regular insurance does not dog bite, then your umbrella insurance will not cover dog bite either.  There are always hidden risks to become a landlord.  if some accidents happens and you are NOT covered by your insurance, then you can lose EVERYTHING.
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NOT really.  assume your rental house values at 500K.  even with LLC, you will still lose your rental house (500K).
 
A family approached me if I would accept section 8 vouchers.  I had to do research because I've never heard about this, but I guess the trade-off would be getting guaranteed rent subsidized by the government at the expense that I may get. low quality tenants. I will also most likely not likely be able to collect on damages since they have no money.

Anyone have experience with renting to low income families in Irvine?  I'm already weary because the family that approached me has 4 kids! I'm not sure if my first landlord experiences should be with an S8.
 
aquabliss said:
I don't know much about section 8 but I got a good laugh when I googled it and came across this page:http://www.wetakesection8.com/rentals/CA/irvine/

In the top left corner of the section 8 Irvine Apartments page is their slogan "Endeavoring to Achieve the Impossible".

There's not much more to be said than that.
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Yea I saw that too. Try searching for Section 8 on Reddit and you will find some horrific stories as well (granted most stories were set in middle America).
 
is it true that tax-free gain is only once per lifetime.  Thus, if you sell the second primary residence, you will NOT be qualified for the tax-free gain.
 
yaliu07 said:
is it true that tax-free gain is only once per lifetime.  Thus, if you sell the second primary residence, you will NOT be qualified for the tax-free gain.
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NVM.  found my answer
http://www.bankrate.com/finance/money-guides/home-sale-capital-gains-1.aspx

?Even better, there's no limit on the number of times you can use the home-sale exemption. In most cases, you can make tax-free profits of $250,000, or $500,000 depending on your filing status, every time you sell a home.?
 
To update everyone.. I've decided to sell my place and have enlisted USC's help.  Didn't make sense for me keep the place for negative cash flow (assuming I have vacancies).  Thanks everyone for the feedback.
 
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