“We’re retiring and moving to Georgia to be near family. Do you think we should sell our University City home or rent it?”
Let me start by saying I’ve advised many people NOT to sell their homes, depending on their situation. I say that because I obviously have a self-interest to just advise you to sell.
That being said…SELL IT!
Why? Three reasons:
#1- Under IRS Code 121, provided you’ve lived in your home for 2 of the past 5 years, you can sell it and exclude up to 500K from taxes. Once you’re out of the home over 3 years, that exclusion goes away (unless you move back in for another 2 years).
#2- It’s unlikely that renters will treat it with as much care as you have. You may be heartbroken to come back in a year and find it’s been run into the ground and abused.
#3- Expensive homes make TERRIBLE cash-flow investments. I’d expect you’d make all of a meager 2-3% on your equity. Sell the home and put your money elsewhere, whether it’s a 2-4 unit property (where you can get 4-8% on your money), bonds (which I know nothing about), or some other solid investment.