sell home or not to sell

joezippy wrote:

toedtoes wrote:
Honestly, I would be asking my "money guy" (financial advisor) not a bunch of strangers on the internet.

Case in point, folks here are speaking of their own experiences - which may be completely different from the OP's due to timing, location, amount of equity, purchase price, health, family, and so on.

Your financial advisor can give you a projection based on YOUR set of circumstances and then you can base your decision of actual data not hearsay.

Several years back, I was considering buying another house. Rather than just go on the advice of friends, I called my money guy. He gave me a very detailed breakdown of how it would change my future and I decided it wasn't the right decision to buy. At the end, he thanked me for checking with him first because he usually gets the call afterwards when the folks realize they totally messed up and want him to fix it all.

So long as your "money guy" has your best interest in mind and not his money... Been burned that way, so I'm speaking from experience. It's always best to do your own homework. Regardless of what others say, but asking never hurts IMHO. Cheers.

Rule number 1 - make sure your money guy is trustworthy.

Rule number 2 - always verify the information.

Asking on a forum can offer ideas, but it should never substitute for educated advice. If you can't trust your money guy, why would you think you can trust strangers on the internet...

toedtoes wrote:
Honestly, I would be asking my "money guy" (financial advisor) not a bunch of strangers on the internet.

Case in point, folks here are speaking of their own experiences - which may be completely different from the OP's due to timing, location, amount of equity, purchase price, health, family, and so on.

Your financial advisor can give you a projection based on YOUR set of circumstances and then you can base your decision of actual data not hearsay.

Several years back, I was considering buying another house. Rather than just go on the advice of friends, I called my money guy. He gave me a very detailed breakdown of how it would change my future and I decided it wasn't the right decision to buy. At the end, he thanked me for checking with him first because he usually gets the call afterwards when the folks realize they totally messed up and want him to fix it all.

So long as your "money guy" has your best interest in mind and not his money... Been burned that way, so I'm speaking from experience. It's always best to do your own homework. Regardless of what others say, but asking never hurts IMHO. Cheers.

Honestly, I would be asking my "money guy" (financial advisor) not a bunch of strangers on the internet.

Case in point, folks here are speaking of their own experiences - which may be completely different from the OP's due to timing, location, amount of equity, purchase price, health, family, and so on.

Your financial advisor can give you a projection based on YOUR set of circumstances and then you can base your decision of actual data not hearsay.

Several years back, I was considering buying another house. Rather than just go on the advice of friends, I called my money guy. He gave me a very detailed breakdown of how it would change my future and I decided it wasn't the right decision to buy. At the end, he thanked me for checking with him first because he usually gets the call afterwards when the folks realize they totally messed up and want him to fix it all.

A 1031 exchange is applicable to investment property. A residence is not eligible.

Moving out of the house gives him some flexibility to declare his current house an investment property, and if his next house is his retirement house, then deferring the capital gains tax can make sense even if the cap gains rate increases later. The rules are complicated and can be time consuming (especially for converting a rental property into a residence), but if you have a large chunk of equity in a house (in some areas of the country, having $2M of equity is not unheard of), and are already planning on being away for an extended period anyway, it may be worth it.

In any case, if he has a lot of equity in the house, taking to a tax or financial advisor makes sense.

valhalla360 wrote:
If you aren't planning to return to the house (as indicated by your post), sell it. By the time you factor in property taxes and insurance, it will be cheaper to pay for a storage unit for a few months.

Then you have better options:
- If you decide you love the full time lifestyle, you don't have to worry about the old house. Eventually, you can have a yard sale with the stuff in storage (or give it to the kids)
- If you don't, when the time comes to buy a new house, you don't have the issue of having two houses with the expenses they incorporate. It makes a much cleaner purchase process and you don't feel pressured to sell the old before buying the new.

Very personal decision, but we were in a similar situation. Sold the house, saving about $25,000-$30,000/yr. (and it was paid for) while we drive around the country figuring out what we will will do on our return and where we will return. Didn't know how it will work out, but not having a house to worry about lets me sleep at night. No time commitments and are actually saving a lot of $$.

rlw999 wrote:

soozcna wrote:
WE are in a situation where we are thinking about selling our home and buying a class A rv to travel for a few months before we purchase another home. We do not have a mortgage and are both retired with a steady income. We are not new to RVing, recently sold a class C. (we are not selling our home so we can travel, we want a smaller home)Need some advice from anyone that has done this. What to expect? What to plan for and if you regretted it. Thanks!

If your current home has a high value and since you want to buy a new home, ask your tax advisor about doing a 1031 exchange and whether that will save you money (basically it lets you roll over capital gains from your current home into a new home without paying taxes on it). Since you get an automatic $500K (for a married couple) exemption on capital gains from selling a primary home (subject to some restrictions), the 1031 exchange may not matter if you're going to earn less than that on your current home.

In any case, there are stringent time rules on a 1031 exchange - you need to find the replacement property within 45 days of selling and close within 180 days.


Otherwise, I'd sell the house and travel and find your new home when you return. Even if it takes longer than expected to find the new home, at least you have the RV to stay in. It'll be easier to stage your vacant house to sell it and your agent will be there to keep an eye on it. And who knows - maybe you'll want to extend your travels and stay home free for another year... Or maybe you'll find a new place where you want to live.

A 1031 exchange is applicable to investment property. A residence is not eligible.

I would not be entering into a 1031 exchange at this time even with an eligible asset sale. A 1031 only delays capital gains taxes. There is a likelihood that the capital gain tax rate is going to rise significantly. If that happens, you may forego a 20% rate today for a 39% rate down the road. That could be a very expensive decision.

The market is crazy right now. I don't know if I would abandon an appreciating asset to live in a depreciating asset. You may find you will be priced out of the market in a short period of time. Seen it happen.

While my bride and I have no plans to ever full time we will continue to actively use our 24' Class C to explore America further. We have been coast to coast and just about everywhere in-between over the last 12 years or so and every trip we kept our eyes open for a new place to live {we had a nice home in Tucson} that we might like better.

Ironically we found that new place just 180 miles north of Tucson in the small mountain town of Payson. We had passed through Payson dozens of times coming/going camping and I frequently remarked that "I could live here" and now we do. Like the OP we wanted a smaller home and our new place is 25 percent smaller but has two and half times as much land allowing us to store all of our toys {car, truck, RV, Can AM Spyder, Rzr SXS and a cargo trailer} at home. Like our old home our new one is paid for and happily our monthly nut dropped $500 a month {no HOA, Hooray!, RV storage fees, lower taxes, utilities etc}.

After 15 years living and exploring southern Arizona we are better positioned far enough north to greatly expand our "local' camping range. I would advise the OP to do some exploring/searching for that next home before selling their current one. An RV enables you to search in comfort and to ferret out those off the beaten path gems as we did.

Moving is one of the greatest PITA's on earth so do your homework {the internet is your friend} to insure you only have to do it once. Good luck!

:B

soozcna wrote:
WE are in a situation where we are thinking about selling our home and buying a class A rv to travel for a few months before we purchase another home. We do not have a mortgage and are both retired with a steady income. We are not new to RVing, recently sold a class C. (we are not selling our home so we can travel, we want a smaller home)Need some advice from anyone that has done this. What to expect? What to plan for and if you regretted it. Thanks!

If your current home has a high value and since you want to buy a new home, ask your tax advisor about doing a 1031 exchange and whether that will save you money (basically it lets you roll over capital gains from your current home into a new home without paying taxes on it). Since you get an automatic $500K (for a married couple) exemption on capital gains from selling a primary home (subject to some restrictions), the 1031 exchange may not matter if you're going to earn less than that on your current home.

In any case, there are stringent time rules on a 1031 exchange - you need to find the replacement property within 45 days of selling and close within 180 days.


Otherwise, I'd sell the house and travel and find your new home when you return. Even if it takes longer than expected to find the new home, at least you have the RV to stay in. It'll be easier to stage your vacant house to sell it and your agent will be there to keep an eye on it. And who knows - maybe you'll want to extend your travels and stay home free for another year... Or maybe you'll find a new place where you want to live.

If you lived in California, it would be a no brainer. If I sold my home, then bought a another one for the same price in a year, my property taxes would go from $1,750/year to over $7,000/year. I would rent it out and take my time to decide what to do. I would pocket another $36,000+ in a year renting my home out.