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Should I Sell Our Rental Properties?

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Should I Sell Our Rental Properties?I love our rental properties, but now I want to sell them. Why would I do that? To be precise, I love our passive income stream from the rentals. Being a hands-on landlord is not bad, but I wouldn’t say I love it. Luckily, we’ve had great tenants for years and it hasn’t been too stressful. So why should I sell? Well, life changes. Owning rental properties might make sense from the financial aspect, but it’s not the right fit for us anymore. Today, I want to share my thought process and get some feedback from the smartest readers on the planet. Read on to see why I want to sell our rentals. We’ll start with the background first, and then expand on the reasons why I want to sell.

Our properties

Currently, we have 3 properties. One is our primary residence and two are rentals. I’ll quickly go through them one by one. The history is somewhat complicated at this point.

Rental duplex

This rental is a single family home that was converted to a top/bottom duplex back in the 80’s. The upstairs is a nice one bedroom apartment with a lot of natural light. The downstairs is a spacious one bedroom unit with an office/den. The duplex is located in a great area that I always loved. I lived in this neighborhood in my 20s and had a great time there. There are many neat shops, restaurants, cafés, and grocery stores all within short walking distance. The Walk Score for this neighborhood is 97! The public transportation is great too with streetcar, light rail, and bus service nearby. It’s my favorite neighborhood in Portland.

rental duplex

The financial side of this duplex is very complicated. We purchased it in 2014 with a 1031 exchange to defer a big tax bill. Here is the timeline.

  • Purchased our old home in 2000.
  • Converted the old home to a rental in 2007.
  • 1031 exchange to this duplex in 2014. (1031 exchange means selling one rental and buying another one.)
  • We will convert the duplex into our primary residence at some point.

We’ll definitely need a good CPA to untangle this mess when we sell. The taxes will be pretty complicated. You can read more detail about our duplex in this post – Our Duplex Investment.

Rental condo

Our rental condo is much less complicated. We purchased it as a short sale in 2011. This condo is in the building next to where we currently live. Originally, we hoped my parents could move into this unit and live here. However, it didn’t work out and we turned it into a rental. This condo is usually easy to rent out because it is in a convenient downtown location. The main problem is the yearly cost increase. The HOA and the property taxes increase every year with no signs of slowing down. This rental condo is not cash flowing for us. Currently, we spend about $50/month to rent it out. However, it has appreciated significantly. You can read more about our rental condo here – Our Rental Condo Investment.

Primary residence condo

We moved into our condo in 2007 when I didn’t want to live in the suburbs anymore. We rented out our 2,000 sq ft home and downsized to a 1,000 sq ft condo. The 2 beds/2 baths condo was perfect for us when we first moved in. There was plenty of space for a couple and 3 cats. We loved living here because the view is awesome and there are plenty of things to do in downtown Portland. However, the condo has shrunk as our family has grown. Now, our son is 7 years old, my mom lives with us full time, and we are down to one cat. A two bedroom condo is too small for a family this size. We’re making do for now, but everyone needs a little more personal space.

view

Rental income

Investing in rental properties is a proven way to build wealth. However, my track record is somewhat checkered. Here is the cash flow spreadsheet for our rentals. The number here is just rental income minus expenses. For me, cash flow does not include depreciation, tax deduction, equity gain, or principal payment. We’ll start in 2014 to keep it simpler.

Year Rental Income Note
2014 $818 Sold rental home and purchased duplex.
2015 -$5,408 New roof at the duplex.
2016 $1,974 Installed new hardwood flooring.
2017 $10,973 Good year.
2017 $6,120 by the end of August Good year so far.

 

Scorecard

Here is a scorecard for the properties. (Low is bad, high is good)

scorecard rentals

The primary residence is the worse investment on this list. We purchased it near the height of the last real estate bubble and it hasn’t appreciated much since 2007.

The rental condo has appreciated about 90%. However, it is not cash flowing and I think the appreciation will slow way down in the next few years. The good thing is that I don’t have to spend much time on this condo. The only time I have to work on it is when there is a turnover. Usually, it’s easy to rent this condo out, but it was vacant for 4 months last time. The previous tenant left before Thanksgiving and nobody wanted to move in the winter.

The duplex has been our best investment so far. It generates a dependable passive income stream and it has appreciated about 40% since 2014. The only issue is that I spend quite a bit of time on this property. Last weekend, we went over to prepare the home for autumn. We cleaned out the gutters, trimmed the bushes, swept around the property, and threw out some trash. I guess I could hire a handyman to do all these things, but it’ll cut into the profit.

Why I want to sell

Whew, that went on a little long, but the history is complicated. My current plan is to sell our primary residence and rental condo, then move into the duplex. We’ll take over both units. Now let’s get to why I want to sell and consolidate.

We need more space

This is the number one reason why we want to move. Our 2 bed/2 bath condo is not big enough for 4 people. Currently, RB40Jr shares a bedroom with my mom. This room also doubles as my office. It worked okay previously, but life is changing. RB40Jr is getting bigger and he needs his own room. Also, my mom is dealing with dementia and she needs her own space. Last night, she was delirious so she kept getting up and waking us up. Everyone is exhausted today. Mrs. RB40 and Junior need their sleep.

Dementia is a big problem. People with this condition don’t deal well with changes. We need to move sooner rather than later. Moving will be more difficult as dementia worsens.

Mrs. RB40 and I need more space too. Our living room has been taken over by Legos, books, a rock collection, and various toys. Once Junior has his own room, he can move all that stuff in there. Lastly, we need a better work area. I want a space where I can work without disturbing the sleepers. Mrs. RB40 currently works at our small dining table. Once we move, we’ll get a big dining table so she doesn’t have to keep moving her laptop around. She can take over a section of the table and just leave her stuff there. The duplex is big enough for all that and more. Everyone will have plenty of space there.

Portland real estate market has peaked

It seems like the Portland real estate market has peaked. The rental condo has appreciated significantly and I don’t think the price will rise much more in the near future. Developers are building so many new condos. It really feels like 2007 with all the new buildings going up.

Real estate is illiquid and I don’t want to have our money stuck there if there is a real estate crash. Anyway, we might as well while the price is high, right?

Selling our rentals

Ugh, this is not a good sign. This home is just 2 blocks away from our duplex. Reducing the price by $200,000? That’s a huge discount. Is the real estate market turning already?

PASSIVE income

I’ve been pretty lucky with the tenants since 2014. Our tenants are great people. They pay rent on time and they rarely call me to fix problems. It’s been pretty passive, but I want our investment to be even more PASSIVE in the future. We want to travel more at some point and we can’t do that while being a hands-on landlord. I still like real estate, though. That’s why I’m investing more in real estate crowdfunding. It’s a lot more passive than owning rentals directly. The income is pretty good and investors get a cut of the appreciation when the project sells. Another thing I like about RE crowdfunding is the ability to spread risk geographically. So far, I’ve invested in Arizona, Texas, Florida, North Carolina, and Missouri. The west coast is getting too expensive for me so that’s why I’m looking in more affordable areas.

You can check out real estate crowdfunding by signing up with RealtyShares. Once you’ve signed up you can research previously funded project and browse new projects. Then you can decide if RE crowdfunding is the right investment for you?

Too many rules and regulations

Portland is becoming less and less affordable. Rent has increased tremendously over the last 10 years. The city council responded by making more rules to protect renters. Here are some of the changes we’ve seen.

  • Notices of rent increases need to be sent out 90 days in advance.
  • Landlords need to give 90 days notice for a no-cause eviction. We also have to pay a relocation fee to the tenant, $3,000 to $4,500. No-cause eviction includes not renewing the lease.
  • If the landlord increases the rent by more than 10% and the tenant moves, the landlord will have to pay them the relocation fee.
  • One of the city council members, also known as the tenant champion, is planning to propose a limit on security deposits and “wear and tear” cost.

Who knows what other rules the city council will come up with next? It’s getting more difficult to be a small time landlord in Portland.

HOA and property tax

This applies to the condos. The HOA fees and property taxes have increased significantly over the last 10 years. It’s pretty much impossible to cash flow these condos now. The only way to profit is through selling and taking advantage of the appreciation. The HOA also prohibits short-term rentals so the AirBnb option is out.

Once we move to the duplex, we wouldn’t have to pay the HOA fees anymore. Also, the property tax for the duplex isn’t that much more than our condo. We would double the space, but will only pay about 20% more in taxes. Overall, our housing cost will decrease a little bit. Of course, we’ll have more home repairs and yard expenses at the duplex. That’s one good thing about living in a condo. You don’t have to do much repair and maintenance.

Tenant uncertainties

We’ve had great tenants since 2014, but I’m afraid this luck isn’t going to hold. I try to be strict when I screen tenants, but you never know. The next tenant might be the proverbial tenant from hell. It’s a dice game and your number will come up sooner or later. At this point, I feel like I should get out while I’m ahead. I can’t deal with problematic tenants right now. We have our own problems as both sets of parents age.

Mrs. RB40 doesn’t want to be a landlord

This is another underlying problem. Mrs. RB40 doesn’t want to be a landlord. She doesn’t want to deal with tenants and she has heard plenty of nightmarish rental stories from her dad. If something happens to me, she’d have to take over and it’ll be difficult for her. I need to simplify our investment so she can handle it by herself.

Alternative to selling

Okay, those are the reasons why I want to sell the 2 condos and move into the duplex. That’s not our only choice, though. Let’s summarize the options here.

  • Rental condo – We need to sell this one soon. The price isn’t appreciating much anymore and it is not cash flowing.
  • Duplex – The income is good from the duplex. We can move into this duplex or keep it as a rental. If I can find a good property manager, it’ll become much more passive.
  • Primary residence condo – We need to sell this one. The price isn’t appreciating and it won’t cash flow if we rent it out.

The only alternative I see is to sell the 2 condos and keep the duplex as a rental. Then we’ll need to find a new home. This might be a good option if Mrs. RB40 retires soon. We could turn the duplex over to a good property manager and move to a location with a lower cost of living. I’m hesitant to move, though. We like where we live and our schools are excellent. I’ll need to consult Mrs. RB40 about this. My wife still isn’t quite ready to retire yet. (ETA 2020.)

Also, we don’t know where we’d move to. Mrs. RB40 probably wants to move closer to her family in Southern California. Her parents live in an affordable area near Palm Springs. I did a quick research at BestPlaces.net, and found that the COL is estimated to be about 20% below Portland. I’m not sure how accurate this is. California has a lot of taxes. I’m pretty sure the schools aren’t that great either. This would be a good option after our son graduates from high school, but I don’t think it’s the right choice today.

What to do with the money?

Finally, I get to dream a little. We should net around $200,000 after we sell the 2 condos. I’ve never had that much cash before. What should I do with it?!

  • Remodel the duplex. The duplex is in dire need of remodeling. There is a long list of projects that we want to do there. We want to refinish the basement, install a new deck, improve the entry stairway, remodel the kitchens, pour new concrete around the house to help waterproof the basement, and so much more. We could easily spend $200,000 if we do it all at once. However, I think we should tackle one project at a time. Refinishing the basement would increase the property tax so that one will have to wait a bit. Higher property tax is no joke. Our next door neighbor is paying more than twice in property taxes as we do, $15,500/year. Yowza!
  • Invest. A better idea is to invest most of that income in real estate crowdfunding or REIT. Then, I can use the passive income to improve the duplex every year. I can call this the “home improvement fund.” We could do a lot with $20,000/year. I’m just estimating a 10% ROI. Also, I could DIY some of the improvements and save even more. It’s pretty tough to find a contractor in this overheated housing market.

What would you do?

My timeline for moving into the duplex is 1-2 years. I’ll raise the rent 9.9% in January and let the tenants know that I’m planning to move in. If they want to stay, they’ll just have to deal with a 9.9% annual rent increase. We’ll see how it goes.

Okay, what do you think? Would you sell if you were in my shoes? Or do you have a better idea? I tend to have tunnel vision when I have a plan.

Sign up with RealtyShares to browse the current projects and see if real estate crowdfunding is a good match for you.

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Joe started Retire by 40 in 2010 to figure out how to retire early. He spent 16 years working in computer design and enjoyed the technical work immensely. However, he hated the corporate BS. He left his engineering career behind to become a stay-at-home dad/blogger at 38. At Retire by 40, Joe focuses on financial independence, early retirement, investing, saving, and passive income.

For 2018, Joe plans to diversify his passive income by investing in US heartland real estate through RealtyShares. He has 3 rental units in Portland and he believes the local market is getting overpriced.

Joe highly recommends Personal Capital for DIY investors. He logs on to Personal Capital almost daily to check his cash flow and net worth. They have many useful tools that will help every investor analyze their portfolio and plan for retirement.

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{ 92 comments… add one }
  • Mr AE September 6, 2018, 1:04 am

    I would def sell the unit that is not cash flowing if you feel the market is turning and you aren’t planning on holding long term.

    It is harder for me to say sell the duplex when it is doing well – but you are already set financially so lifestyle reasons can trump the $

    • retirebyforty September 6, 2018, 8:37 am

      The housing market is slowing down. I’m starting to see price cut again.
      Oh, I forgot to add that there is a big building under construction next to the rental condo. It’s not a good time to sell because it’s noisy and messy. I’ll try to sell next year or in 2020 when the new building is done.

  • Dividend Pursuit September 6, 2018, 1:50 am

    Joe,
    Thanks for sharing your journey truly inspiring. I do like rentals a lot. I have a three unit that I am trying to convert to a 4 unit soon. The cash flow is amazing, so I would definitely keep the cash flow rental and probably buy a new house, close by until you are ready to move to California. The condo’s that are not cash flowing, you are probably better off do a 1031 exchange with a new rental where you find cash flow. I think Midwest would be a great place to start looking. Of course find a property management frees up a lot of your time and provides a peace of mind with rentals.

    Dividend Pursuit

    • retirebyforty September 6, 2018, 8:39 am

      The problem with buying a new house is the price. Housing is expensive in Portland now. If I’m right and we’re at the top of the housing market, then it won’t be a good buy. 1031 exchange into a new rental in the Midwest is a good option, but Mrs. RB40 still doesn’t want to be a landlord. She’d rather take less return and simplify life. I think that’s how most people think.

  • Xrayvsn September 6, 2018, 2:26 am

    Hey Joe,

    I think in that situation I would definitely sell. Especially if signs point that property values may have peaked or even started to decline. I personally have shied away from active real estate management (I just have 1 guest house I manage for rent) and keep myself invested in real estate through passive options (since I am an accredited investor I do private syndication deals and have had great experience with them so far). Really is like mailbox money and I still can take advantage of all the tax breaks real estate offers (if you are interested there are several posts on my blog that I have written about: X-ray beam Interview Dennis Bethel who is a principal in the syndicated company I invest in provides a lot of great resource links on crowdfunding vs syndication; A Credit to Your Name (deals with accredited investor requirements) ; and What’s The Alternative (shows my personal real estate exposure and returns)).

    Moving to your duplex sounds like a great way to up size as well as eliminating any real estate transaction costs so it’s a win-win.

    • retirebyforty September 6, 2018, 9:39 pm

      I thought private syndication is about the same as crowdfunding. Probably less fees. I’ll check the resources you recommend.
      You’re right about minimizing RE transaction costs. That’s one problem with selling.

  • Wealthy Doc September 6, 2018, 2:31 am

    “Mrs. RB40 doesn’t want to be a landlord.”
    There is your answer, my friend.
    You are in “the squeeze” of the “sandwich generation.” I have felt the pressure myself. We have enough for ourselves but we have to also help our parents and our children. There is a lot going on there without having marital differences or tenant hassles. My wife and I owned a rental property that was financially a good deal, but my wife didn’t want to be a landlord. She kept getting calls about issues that wasn’t how she wanted to spend her time. We sold it and never looked back. ( I do own plenty of real estate – but no more tenant calls)

    • retirebyforty September 6, 2018, 9:41 pm

      We’ve been really lucky with calls. It’s been very smooth for a while now. You’re right on, though. I don’t have as much freedom now with my mom’s issue.

    • Ramona @ Retirement Blog September 8, 2018, 7:12 am

      100% agreed.

      At the end it comes to YOUR FAMILY and what works for you, leaving money aside. It’s good to earn an income from your rentals, but, if it’s better for your family to go with this plan, I’d not waste another minute. At the end of the day our biggest ‘obligation’ is towards our loved ones.

  • Accidental FIRE September 6, 2018, 2:33 am

    Hmm, tough one Joe. I’d be careful before moving to California, mainly because of taxes but also other regulations. I’ve done some posts showing how expensive it can be. But since you live a very un-traditional lifestyle it might actually work out, you’d have to dive in. Good luck with it!

    • retirebyforty September 6, 2018, 9:44 pm

      Sometimes you gotta do what you gotta do. Mrs. RB40 wants to help her parents when they need it. We might have to relocate there temporarily. Maybe we could make it work by sending Junior to a UC. Being a resident of CA will save us a bunch.

  • Mrs. Groovy September 6, 2018, 4:10 am

    I’d take it one step at a time. You need more space. Mom isn’t getting better and the situation will become more stressful. Your wife doesn’t want to be a landlord should something happen to you. What’s the first and best move you can make that would help prevent you from going to sleep and wake up with a knot in your stomach? That’s where I’d start, money aside.

    • retirebyforty September 6, 2018, 9:45 pm

      Thanks. Money isn’t the only consideration in life. We need to simplify our finance for now. Once our personal situation is better, we could look at rentals again.

  • Financial Verdict September 6, 2018, 4:22 am

    If it were me, I would try to get rid of the tenant in the duplex, move into the duplex and sell the 2 condos. I wouldn’t buy a new property at what feels like the top of the market.

    Once you get settled, and the timing is right you can: (i) decide to stay or (ii) buy another place to live and either sell or rent the duplex.

    • retirebyforty September 6, 2018, 9:47 pm

      You don’t want to try to get rid of the tenants. That’s an invitation for a lawsuit.
      I’ll just encourage them to start looking and let them know that rent will increase 9.9% every year.
      I don’t want to buy either. The timing is not right.

      • Financial Verdict September 7, 2018, 2:25 am

        You are doing the right thing. By “get rid” of the tenants I meant doing exactly what you are doing in your situation – price increases that you hope will result in them wanting to live elsewhere.

        I wouldn’t want to be a landlord in Portland with the rules the city has in place limiting your ability to run your own property.

  • Dave in Sunny FL September 6, 2018, 4:29 am

    Reinvesting the proceeds in crowd funded real estate or REITs both mean a huge tax bill. Consider turnkey real estate, in the cash-flowing mid west or south. There are lots of providers. One that I know of is JWB, which builds, rents, sells, and then manages single-family homes in the Jacksonville, Florida area. Buying a newly built house, with a tenant already in place on a two year lease, seems like a good formula and a great start for a truly passive investment.

    • jp September 6, 2018, 6:57 am

      I was thinking along these tax lines as well….that would be on hell of a tax bill. However, the one condo they are living in, wouldn’t be taxed as a rental – it is their primary residence, so it’d be taxed differently. The second condo though….I’d definitely talk to a CPA/tax person. I’d assume it’d be better to sell in different years, if they were going the cash out direction(? – no clue), but I’d lean towards the selling it – even if you do another 1031 exchange. You aren’t cash flow positive, expenses are rising, real estate is at a high, regulations in Portland are horrible and getting worse. Where are you looking at for after Jr. leaves (most people would call that retirement, but you’re already there!)? Could you repeat what you’ve done with the duplex? Buy your next house, rent it out until you’re ready for it? Or a vacation house, used as a rental?

      • retirebyforty September 6, 2018, 10:08 pm

        Right. We won’t have to pay taxes on the primary residence. The rental condo will be taxed. The depreciation recapture will hurt. If we do a 1031 exchange, we’d probably go for a different location. The problem is we aren’t sure where to move to. Buying in CA wouldn’t work either. I’m pretty sure that it will be very difficult to cash flow.

    • retirebyforty September 6, 2018, 9:50 pm

      There will be a big tax bill. We’ll probably have to just bear it. I’ll look into JWB. That sounds interesting. Do they do 1031 exchanges?

  • Caroline September 6, 2018, 5:00 am

    Hi Joe,
    That is a tough one.
    I probably would not make long term decision involving your mom as far as real estate, because with dementia, you may not be able to keep your mom living with you forever. It does get really bad, both my in-laws had dementia:(
    I struggle with being a landlord myself (three townhouses) but love the appreciation.
    I would still sell the unit with poor cash flow. Probably wouldn’t invest too much in renovating the duplex if you move into it, until you are 100% sure that is where you want to stay.

    • retirebyforty September 6, 2018, 9:53 pm

      I’m sorry to hear that. Dementia is pretty bad. We’re just at the starting point and it’s already tough.
      The good thing about the duplex is that we could rent a unit out with Airbnb. If my mom needs to go to an elderly care facility, we will have other options. Good advice about putting off renovations. We’ll just do minor updates until we’re sure we want to stay.

  • Ms. Frugal Asian Finance September 6, 2018, 5:04 am

    Thanks for sharing the great analysis, Joe!

    If I were you, I’d also sell the primary residence and the rental condo since they don’t seem to /won’t be able to cash flow very well. Moving to the duplex is great because (1) you already own the place and (2) it provides more space for the family. Having lived with the parents, I do think it’s important for everyone to get their own space so that we can all get some peace in our daily lives.

    • retirebyforty September 6, 2018, 9:54 pm

      It’s not easy to live with parents. How do Asian people do this?

  • Tom @ Dividends Diversify September 6, 2018, 5:13 am

    I’m not much into real estate Joe. Just by reading the complexity of the situation through your description would make it far to time consuming for me to have ever gotten involved. Your logic is all very sound. I am very biased against real estate investing (I know many swear by it and that’s fine), so I would sell and create a new situation that fits your life better. Tom

    • retirebyforty September 6, 2018, 9:56 pm

      Real estate is a proven way to build wealth. I like it, but it’s additional stress. Exceptional investors find ways to offload that stress to their support staff. Unfortunately, I’m not good at delegating.

  • gayle September 6, 2018, 5:29 am

    I would def sell the non-cash flowing condo ! I would prob move into duplex with more room for you mother and your son ! sell the other two. Simplify your life..the duplex sounds like its in an amazing area. IF you want to invest in more real estate for cash flow, go to a different area and buy some ! Good Luck ! Keep us posted !!

  • Lazy Man and Money September 6, 2018, 5:36 am

    I’m a big proponent of owning real estate for income, but you’ve laid out almost a perfect, airtight case for why it’s not a good fit for you in your situation. It’s hard to even make a Devil’s Advocate given that Portland seems to be a nightmare for landlords with the regulations.

    I wonder how much that $200,000, if invested, would increase your FI ratio. I’m not sure I’m sold on the 10% return. I think REITs are generally closer to 7%, so unless Reality Shares has some crazy returns it would be hard to see that hit 10%, especially if you factor in taxes.

    • retirebyforty September 6, 2018, 9:58 pm

      I’m not sure how the FI ratio is going to work out either. We’d lose the rental income, but our COL would drop a bit. I guess we’ll see how it goes in a few years. Yes, taxes will cut into the ROI. 8-10% would still be pretty good.

  • Freedom 40 Plan September 6, 2018, 5:36 am

    I struggle with similar questions on a regular basis. I have just one rental condo, which most of the time is easy to take care of. However, from time to time it can be a real pain in the butt – not nearly as passive as I would like. In addition, it’s not really providing much cash flow. I’m holding on to it for now, but at some point I may sell it and put all the proceeds into the market (VTSAX / VTI). I’m not too bullish about real estate crowdfunding, primarily because of the newness of it all. I just don’t feel like there’s enough data about the investment product to know with much certainty if it will work out or not. Anyway, good luck with whatever you decide!

    • retirebyforty September 6, 2018, 10:01 pm

      Cash flow is a problem here in Portland too. The property price is so high now that it’s really tough to cash flow.
      RE crowdfunding has been great for me so far, but I’m a bit nervous too. I don’t know how they’ll perform through a recession. I guess the holding period would be extended and the payment may reduce. As long as the apartments are run well, it should survive.

  • Mrs. 50 September 6, 2018, 6:00 am

    If I were in your shoes, I’d definitely sell the 2 condos (your current primary residence and the no-cash-flow condo), move to the duplex (don’t buy a new house so you can avoid real estate fees and your wife doesn’t want to be a landlord), and invest the proceed from the sales (invest first and use return to do renovations).

    We had 2 rentals in the past. One was hell. Another was ok. We sold both when we bought our home last year (to free up some cash flow). We should have kept the one that was ok considering the market was doing much better (rent has gone up + appreciation). However, we couldn’t predict the future.

    Great analysis, Joe. Thanks for sharing!

    • retirebyforty September 6, 2018, 10:02 pm

      Thanks for your opinion. Hindsight is always 20/20. Our old rental home did very well too. We should have kept it. 🙂

  • Angela @ Tread Lightly Retire Early September 6, 2018, 6:02 am

    I’d definitely sell. Any rental that isn’t cash flowing, especially when you can sell for a nice bit of appreciation, really doesn’t make any sense. We actually have a serious lack of condos up here because Washington state law is written as such that a developer is basically guaranteed to be sued if they build one. So unsurprisingly, they don’t get built.

    • retirebyforty September 6, 2018, 10:03 pm

      There are a bunch of condos coming up in Portland. I’m not sure how they will affect the price. There will be more units on the market, but they will be smaller and more expensive than our condos. I’ll try to sell ASAP.

  • Financial Samurai September 6, 2018, 6:09 am

    I’m surprised the property bought as a shortsale at the bottom of the market isn’t cashflowing. That doesn’t make sense. Is it really just the HOA?

    I don’t regret simplifying life 1 year after selling my rental house. It feels great to have more passive income.

    Sam

    • retirebyforty September 6, 2018, 10:04 pm

      The HOA and property tax have increased quite a bit. I couldn’t increase rent enough to keep pace. It’s crazy. I’m looking forward to a simpler life.

  • beth September 6, 2018, 6:18 am

    I am all for simplifying so I would dump all of the rentals and buy some passive investments. ETFs and REITS never call in the middle of the night to say that the toilet is overflowing.

    Your mom makes the situation very different. If you choose to keep her home, perhaps, you could convert the duplex back to a single family home. She will continue to wake in the night and may wander. Consider door alarms so you are alerted if she tries to leave.

    • retirebyforty September 6, 2018, 10:06 pm

      Luckily, we never had that call. I put in new toilets premtively. 🙂
      I think we can make the duplex work. There is only one external door. She should be okay for a while. If wandering becomes an issue, then we’ll probably need to figure out a different solution.

  • Dividend Income Stocks September 6, 2018, 7:09 am

    I totally support your plan to sell rental properties. The housing market has peaked and taxes with condo fees are raising faster than the rental income. However I’m not sure if I would want to move to a duplex knowing that I’ll need to undergo major renovations. I would sell everything and more outside the city, but in a new place, maybe a 3-bedroom townhouse, with a basement and a garage. I like the idea of investing through crowdfunding and REITs… no tenant headache…

    • retirebyforty September 6, 2018, 10:10 pm

      We can’t move too far yet. Mrs. RB40 is still working nearby. It might make sense to move across the border to WA, though. I’ll think about it.

  • Susan @ FI Ideas September 6, 2018, 7:33 am

    My favorite part of your post is when you say you are just about to raise the rent by 9.9%. Your analysis and plan here is very good. We have a similar situation, with our primary home and 2 rentals, and I really appreciate the details you have here, since our troublesome halfplex has turned over and we are knee-deep in cleaning up the filth from our Section 8 tenant. I think the real estate market is at another bubble point, but here in the Central Valley of California, it is still appearing to be hot.

    If I were you (which I sort of am right now), I would look most closely at the tax situation. For us, we have to repay our Obamacare subsidy if we sell. It sounds like you’ve estimated it, but it is hard to get a truly accurate picture of the capital gains recapture and look at it via the new 2018 tax laws. In the end, it seems you are going to be coming away with 200K by selling. I think I would try to invest enough to replace the current cash flow. I like the concept of a “home improvement fund”. Especially because homes call out for various repairs annually anyway. Good luck. I look forward to seeing how the sales go.

    • retirebyforty September 6, 2018, 10:13 pm

      We had section 8 tenants at our old 4-plex. Luckily, we had a property manager for that property. It still gave me a headache, though. It’s been much better with our current rentals. They are in a nicer location.
      I’ll check the new tax law. I don’t think it changed much in this case, but I could be wrong.

  • Isaac, Live Fi and Free September 6, 2018, 7:40 am

    When I read the title, the real estate investor in me said “No way” to selling any of them. But then I read into the details of the article. I am assuming that cash flow is your end game goal and appreciation is always nice. The tax benefits that come along with rental properties are undeniably awesome and of course the principle is getting paid down each month which provides a hidden stream of income. I would immediately sell the non-cash flowing condo. No cash flow is a recipe for headaches as im sure you already know. All the maintenance and repairs come out of you personal pocket. Condos are also subject to HOA’s, some of which are managed well, some are not. My grandma lives in a nicer condo here in Minneapolis and each resident just got slammed with a bill for $52000 for new siding because there was not enough reserves in the HOA. For this reason alone, I’m not a believer in condos. I would sell both as fast as possible. Enjoy the gain from appreciation, and the depreciation recapture tax is going to bite but it’ll be over and done with. Had the condos been cashflowing my opinion would have changed a bit. Had both condos cashflowed I would have purchased another duplex to live in with a low down payment loan like FHA or 203K, and hired a property manager to deal with the properties. Might cut into the cashflow a bit but, you’d get to keep all the fantastic tax benefits, appreciation over the long term, the principle pay down, and the inflation hedging that comes with a long term fixed interest rate debt. With you unique scenario Joe, I think you’ve got the right plan, but you’ll have to act fast. Once school starts, the number of people looking for a new place drops significantly. Best of luck! Be sure to keep us all in the loop!

    • retirebyforty September 6, 2018, 10:17 pm

      Thanks for your input. The rental condo hasn’t had many problems with repair and maintenance. There aren’t many things that can go wrong in the unit. The HOA takes care of external maintenance. But, the HOA fee has increased quite a bit. It’s time to get out. I don’t believe in condo anymore.
      Actually, we’ll try to get this done in 2019 and 2020. I’m kind of slow.

  • snowcanyon September 6, 2018, 7:58 am

    The Portland rental laws are insane and will certainly drive out small-time landlords resulting in consolidation of the rental market in the hands of a few larger and less sympathetic corporations. Additionally, tenants have now locked themselves into guaranteed annual rent increases of 9.9%! If Portland wants lower rents, it has to build more housing to meet demand, which just isn’t happening.

    The duplex sounds like the best property and the one that will hold its value longest. Agree that selling and moving in is the best plan. Good luck.

    • jim September 6, 2018, 9:40 am

      “Additionally, tenants have now locked themselves into guaranteed annual rent increases of 9.9%!”

      False. Rents went up ~5% last year. You can’t raise the rent unless the market will bear it. Yet some keep making this silly claim that the law will cause 9.9% increases forever.
      I’m a landlord. The rules in Portland are not onerous and nothing that cant easily be taken in stride. There is a bit too much hysterical over reaction to the laws by some.

      • retirebyforty September 7, 2018, 10:45 am

        Jim is right. If you raise rent too much, tenants will move. The new rules haven’t impacted us much, but I’m just afraid of more rules.

  • Doc G September 6, 2018, 8:41 am

    I think you have answered your own question. You should definitely sell both condos. When it comes to the duplex, and if you want to stay in the area, then move in. Otherwise sell it and move to Ecuador, or Panama, or somewhere else. I know, with a parent with dementia you are not moving out of the country but a guy can dream, right?

    Best of luck!

  • Felipe September 6, 2018, 8:44 am

    Nice analysis. My gut says keep the rentals. What investment would you have that is such a good hedge against inflation? I have always feared a return to the inflation we had in the 70’s. I have friends in South America who are comfortable because they have property. Rentals are a pain, no doubt. But I don’t know of a better inflation hedge. Then again, I know what a pain they are. I’ve been to housing court, had tenants who knew the system and how to play it. So I see both sides.

  • Cubert September 6, 2018, 8:57 am

    Hey Joe,
    First off, I’m feeling you with the troubles on the home front. You’re a wonderful kid for bringing your mom into your home – more of us should consider this and avoid simply sending them to the “home” straight away. My grandmother dealt with Alzheimer’s, so I can only imagine.
    I think you have a solid plan. A couple things to consider: If you wanted to shed some of the risk of vacancies, see about getting a real estate professional’s license (agent or property manager). I believe you can then write off all vacancies on your taxes.
    The other thing is I’m not sure if you’d be on the hook for depreciation recapture. It may not be too bad, but I think it’s generally 25% of the total amount you’ve claimed in depreciation on rentals over the years.
    Main thing is you need space. You’ve got a good alternative outlet for diversifying with RealtyShares. Do what you and Mrs. RB40 desire to find a comfortable living space. I like Palm Springs – you’ll like the extra sunshine, and old town PS is really on the upswing.
    Good luck with your decision!!

  • jim September 6, 2018, 9:32 am

    “Mrs. RB40 doesn’t want to be a landlord”

    DING! We have a winner! 🙂 I think that right there should be good enough reason to sell.

    Seriously though I think selling at this point sounds like a good move overall. At least the rental condo and primary residence.

  • Ms ZiYou September 6, 2018, 9:54 am

    I like your plan Joe – sounds like you need to get those condos ready to sell and see when your duplex tenants are ready to move out. Life’s too short to over complicate and stress yourselves out.

  • Eric @ Flip n Finances September 6, 2018, 9:57 am

    Hi Joe,

    Awesome insight into rentals. I’m in favor of you selling the 2 condos and moving into the duplex for at least the next few years. You’d probably have to kick out the tenants and live in the entire thing from what it sounds space-wise, but you would have the money for renovations from selling the 2 condos.

    I would stay there until you and your family decide where you want to move, and then you can rent it out again once you take your next step in your journey.

  • Laura September 6, 2018, 11:09 am

    The market is turning, at least in town (‘burbs are faring better and prices continue to appreciate there). House next door de-listed for now. And quote from our realtor’s monthly newsletter reads “…condo listings vs. sales seem to be at an all-time high.”

    No real advice. Good luck.

  • Brandi September 6, 2018, 12:25 pm

    Hi Joe,

    Long time reader first time commenter. One possibility I haven’t seen mentioned and might be worth looking into is selling your primary residence condo now, and moving in to the rental condo for 2 years before selling it. This would allow you to save a lot on taxes on the appreciation they both have had, because if you live in a place for 2 of the last 5 years you can have up to $500k capital gains tax free when sold, and still fits in to your timeline of moving to the duplex in 2ish years.

  • Young and the Invested September 6, 2018, 12:44 pm

    This post has a lot of details and even more to unpack and digest. I’m not sure I’m capable of doing that in a comment, it’s likely needs an entire post, so I won’t try.

    My thoughts: sell the condos that have become difficult to manage if they A) aren’t providing decent cash flow returns and B) aren’t set to continue their unabated appreciation. There’s not a sufficient risk/reward trade off in my mind to overcome the nightmarish protections put in place for tenants to justify you continuing as a landlord. The investments made a lot of sense for you at the time but the rationale has changed. The work involved for the pawltry return doesn’t seem worth it in my mind.

    Moving to a lower cost of living area would be your ideal and selling all of your property for a very nice net gain. But barring that possibility, moving into the duplex while selling the two condos seems to be your best bet. Taking the proceeds and investing into Realty Shares or some other passive income source sounds more in line with the participation level you’re looking to have with your investments. Best of luck and keep us in the loop with whatever decisions you end up making!

  • Independence Engineered September 6, 2018, 12:45 pm

    I just did a blog post on my blog about the San Diego housing market and what I am seeing is that overall homes are sitting on the market for longer. More listings go expired. You are seeing homes sell for less than those that sold a couple of months prior and etc. Not to mention the Redfin CEO talk about a slower Aug and Sept.

    Personally I would try and sell given the fact that it’s less headaches in the long run. Happy wife is a happy life! I would probably do what you recommended with regards to probably invest in RealtyShares and use some of the rest of that money to redo the house you are planning on moving in. Also selling would help you get closer to your goal for real estate crowd sourcing!

    Best of luck on your decision.

  • Joe September 6, 2018, 12:55 pm

    Selling the highly appreciated condo would incur a lot of taxes. I can’t stomach the tax payments, it’ll eat up a huge chunk of the profits. We have it worse in CA because state taxes add another 13.3% on top of federal taxes. My plan is not to sell my real estate until I pass away, then my wife and kid can get all the gains tax-free with the step-up in basis.

    • jim September 6, 2018, 4:10 pm

      CA doesn’t hit 13.3% until you get to $1 million income.
      OR also has high income taxes and actually OR income taxes are higher for most people than CA.
      Oregon pays 9.9% at $250k+ (married). CA pays 9.3% at that level.
      OR 9% rate states at just $16k. CA doesn’t top 8% until over $80k.

      Granted if you’ve been invested in real estate for decades in CA you may hit that $1M level.

      • Joe September 7, 2018, 7:48 pm

        Thanks for the clarification, OR taxes are painful also!

        Yes, I have indeed hit the 13.3% level multiple years in a row, which is why I know about it. It’s also why I am so resistant to selling any assets. I would also suggest Joe to be very clear about all the tax ramifications before selling.

  • Joe September 6, 2018, 1:01 pm

    I have 4 rental properties, two managed by property managers, and the other two self-managed. For the self-managed ones I have a really good handyman, otherwise I wouldn’t be able to self-manage. But this year, I decided I got tired of doing the turn after lease expiration. I did a lot of the clean-up and all the tenant screening myself. Next time, I’m going to hire all of it out, it’s too much work. I am lucky in that all of the properties have very high cash flow since I timed the purchases well, and would cash flow well even with using property managers.

  • [email protected] September 6, 2018, 1:53 pm

    I’ve got the real estate bug recently so when I first read the title, I was thinking…”No.” But after reading your post, I think you have a solid plan and it makes sense to sell. That is especially true since the condo and your primary residence do not/will not cash flow. Plus, you’re probably right that the market has peaked or close to it so it makes sense to cash out.

  • Revanche @ A Gai Shan Life September 6, 2018, 2:37 pm

    Wait a second, if you don’t renew the lease, that’s a no-cause eviction?!? I am so confused about how that makes sense. That turns a lease/rental into a contract with penalties for allowing the contract to end. I’m awestruck. Are you allowed to change the terms of the lease substantially if you’re renewing so that the tenant chooses to leave or stay or are you also stuck renewing the lease on the same terms?

    That right there turns the risk situation for a rental into one that I wouldn’t want to accept, not at that cost per tenant. Add that to the other complications you’re dealing with personally with your family growing and Mrs RB40 who doesn’t want to LL, I’d be seriously considering getting out of the business.

    PiC won’t want to be a LL if anything happens to me so the plan there is to sell the rental if that situation comes up.

    Sounds like moving to the duplex for a while and investing the money until RB40Jr is out of high school might be the best way to handle this for now.

    • Dave September 6, 2018, 10:00 pm

      This is the beginnings of rent control. Rent control including “just cause” eviction statutes are common in San Francisco, Los Angeles and New York. It effectively shifts some rights from the landlord to the tenant. In California, there have been (thus far unsuccessful) ballot measures to implement more rent control with rental prices rolled back to rates from 2 years ago. In addition to cyclical market risk, there is a growing wave of regulatory risk due to increasing rents. That doesn’t mean real estate investing is a bad idea; it just means one needs to stay on top of all the changes and price in the risk.

    • jim September 7, 2018, 10:39 am

      Yes if the landlord decides not to renew the rental agreement then that is a ‘no cause eviction’. In that case the landlord is effectively kicking out the tenant without a reason.

      If you make a “substantial” change in lease terms and the tenant disagrees and moves you also have to pay relocation.

      Let me ask : Why would you want to kick out a tenant without cause?

      • retirebyforty September 8, 2018, 6:13 am

        Revanche needs to know this because she is a landlord in the Bay Area. I think they have some kind of rule too.

        • Dave September 14, 2018, 3:38 pm

          Every locality has a different set of rules. “No cause” and “Just cause” are subjective terms. In LA city for buildings under rent control, for example, it would be difficult to get rid of a tenant who is harassing other tenants or smoking in the unit (if that is forbidden in the lease) or maybe even suspected of selling drugs. The burden of proof is on the owner, likely in a court of law. Even if you had witnesses (aka other tenants), good luck getting them to show up in court and testify against their neighbor who may or may not be evicted after several months of court proceedings. Result: Bad tenants stays; good tenants move away to avoid the trouble.

  • GYM September 6, 2018, 11:30 pm

    Are you allowed to increase the rent by 9.9%? here in Vancouver they restrict it to a certain amount adjusted for inflation. 10% return on real estate crowdfunding is amazing!! I haven’t tried this real estate crowd funding but might look into it in the future.

    Sounds like you have a good plan in place, very smart that you guys bought the duplex previously and now you have options.

    PS your view from your condo is GORGEOUS!

    • retirebyforty September 7, 2018, 11:15 am

      You can increase the rent as much as you want. But if the tenant moves, then you’ll have to pay them the relocation fee.
      I think the RE crowdfunding ROI is coming down a bit. Most equity projects I’ve seen estimate the ROI at 12-17%. Of course, it doesn’t always work out as planned. Those estimates may be high and some project might fail.
      I really love the view too. We enjoyed living here for the last 11 years, but it’s about time to move on.

  • Mr. Tako September 6, 2018, 11:42 pm

    There’s plenty of ways to generate cash flow that take less work than rentals Joe. I think you’ve got the right idea — sell the condos and move into the duplex. Fix up the duplex slowly rather than a big remodel.

    It’ll be better for everybody. I know the taxes will be a pretty big hit, but look on the brightside — taxes mean you made some significant money.

    • retirebyforty September 7, 2018, 11:16 am

      Right, taxes mean we made money. Sometimes you just have to take the hit. The biggest gain is at the duplex anyway. We don’t have to pay that yet.

  • Lily | The Frugal Gene September 7, 2018, 1:05 am

    Holy crap I’m sooooooo late to the party. I glimmer through everyone’s responses and funnily I have similar ideas that seems to be said. Condos are first to rise and first to fall typically. Duplexes are a rarity and that itself seems like a better long run investment. I would sell the units if you don’t want to sit through the downturn. However I will say I’m very bullish on long term Portland growth. I’m thinking like 20 years from now etc. It will be a new hip mecca once Cali is covered in fires and heat waves. But then again, your final plan is a house in the Hawaiian islands so you might not want to sit that long.

    I like what Mr Apathy said…if it’s not about the money, what would you do?

    • retirebyforty September 7, 2018, 11:18 am

      You’re right about condos. There are so many of them coming up now. I don’t think the market can absorb the new units unless we have more Californians moving up here. 🙂
      The duplex is a lot more flexible. We could turn it into an SFH or use it as an Airbnb later.
      If money wasn’t a consideration, we’d buy the 3 bedroom penthouse in our current building. We enjoy living here. However, the HOA and property tax are too expensive. Oh well, you can’t have everything in life.

  • The Frugal Physician September 7, 2018, 2:38 am

    Thanks for sharing! Great read.

  • Amit Kumar Bansal September 7, 2018, 4:27 am

    Every Person opinion is different in my opinion we must calculate the bootup value minus depreciation vs the growth of money if invested in other segments like equity. Which is better if money matters.

  • bellbang September 7, 2018, 6:57 am

    In earlier post you mentioned wife is going to retire
    Why dont you think about selling all three of them, relocating to cheaper options like arkansas, raleigh, nashville wherein single family home cost comes way below 400k
    I checked property taxes in this area. On an average for 2000 sqft home it is $2000 per year
    Even less in some places
    Give it a thought

    • retirebyforty September 7, 2018, 11:20 am

      She’s not quite ready to retire yet. The ETA is 2020 for her. We could wait a bit longer and stagger the process somehow.
      I’m pretty sure she’d rather move to southern CA to be closer to her parents. They’re getting older and will need more help soon. Later on, we’ll be more flexible.

  • Steve @ familyonfire.org September 7, 2018, 9:22 am

    We have considered buying into real estate, either by getting a rental property or investing in a flipper (although the ethics may be questionable there). At the end of the day it would be more hassle than it’s worth.

    I think you are right about the Portland market though, here in Concordia neighborhood we are seeing a lot of buildings hanging around and taking much longer to sell.

    • retirebyforty September 7, 2018, 11:22 am

      Thanks for your input. RE investing is a better fit for some people. Mrs. RB40 doesn’t have the temperament for it. I’m not great at it either, but I’m doing okay with it. It can be a lot of work if you don’t run it right.
      I hope it doesn’t slow down too much. We’ll try to sell next spring/summer. It’s too late this year.

  • Lilith September 7, 2018, 10:15 am

    I’m in a similar situation. We had 3 properties and we just sold 1 condo that was a rental. We are still holding another rental condo that has appreciated a lot because we do not want to pay all the capital gains tax on it. Maybe we will look into 1031 exchange and converting to owner occupied later.
    Are you just planning on paying the capital gains on your rental when you sell?
    My mother is also going to move in with us and I’m seeing some signs of perhaps early dimensia. I’m a little anxious about it especially since I have a baby.

    • retirebyforty September 7, 2018, 11:26 am

      Yes, I plan to just pay taxes on capital gains and depreciation recapture. I’ll talk to a good CPA and get some input too. Maybe I can 1031 exchange it into an RE crowdfunding project. I know some companies do that, but usually, they have a very high minimum. Like $500,000.
      You should take your mom to see a neurologist. They need a baseline so they can compare it to the next time you come in. An early diagnostic is better. My mom did pretty well with my brother’s baby and little kids. She enjoys spending time with them and they seem to help with dementia. My kid is getting older and rarely plays with her anymore.

  • FIRECracker September 7, 2018, 1:16 pm

    My grandmother had Alzheimer’s and it was really difficult on my uncle to take care of her his family, and work at the same time (she was living with my uncle, aunt and cousin). She would be throwing fits a lot, and the stress got to the point where it wasn’t manageable without a home nurse or moving her into a nursing home. So I really feel for you. You definitely don’t need more stress in your life and it makes sense what you’re saying about needing a separate room for Rb40Jr and your mom.

    If I were you, I would do exactly what you’re thinking–which is sell the condos and move into the duplex. Then invest the money in REITs. More passive, liquid, and better diversification.

    Hang in there! It’s wonderful what you’re doing to take care of your mom.

    • retirebyforty September 8, 2018, 6:15 am

      Dementia is hard to deal with. My mom is okay on most days so I can still handle it. Eventually, we probably will need to find a nursing home, maybe in Thailand. It’s much cheaper there. I wouldn’t mind living there for a while. I don’t want to move while our kid is in school, though.
      Thanks for your comment.

  • Allen September 7, 2018, 7:09 pm

    You could get another comfortable duplex and House Hack, live in one part of the duplex almost or close to free, and have the tenants pay for that duplex.

    • retirebyforty September 8, 2018, 6:15 am

      That’s not going to work in Portland. The housing price is too high now. You can’t cash flow it.

  • Mayan Queen September 10, 2018, 9:23 pm

    My mom has dementia and it is not healthy for your child or the rest of the family to deal with a person with dementia on your own. Dementia patients do not like to interact with children and are often mean to the children. Of course not all cases are the same, some are violent. They also suffer anxiety, depression and lack of appetite. The caregiver’s health also gets affected. In my mom’s case I managed for her to live independent in her own apartment with multiple care givers. I also took multiple workshops to learn to deal with her, etc. I love my mom dearly but the desease can drive everyone crazy! I realized that I don’t really have a mom anymore but it is still my responsibility to make sure she lives a life with dignity.

    She qualifies for more services now that she lives on her own apartment. She receives In Home Service Support, SSI, etc. If I help her she receives less benefits. She now lives in a building for seniors with her care giver. There are activities like bingo, dance, paint, etc. I hope that this helps you realized that just like your child, your mom needs special care and activities to help her exercise her brain…my mom is now 94. I personally don’t think it is a good idea to completely incorporate your mom to your life. Instead look for a place that will better care for her, there are many daycare centers as well. I chosed a senior apartment. It is really pretty, has a gym, ponds with Koi, pool table, etc. I still do grocery shopping for her and caregivers , ocacionalky I sleep over, join her during bingo/art. It hasn’t been easy but it is physically and mentally healthier for everyone!
    Blessings!

    • retirebyforty September 11, 2018, 10:10 am

      Thank you for your comment. My mom just started showing the bad symptoms recently so we’re still learning how to deal with it. It’s hard, but we can handle it for now. Once it gets worse, we’ll need to find a better alternative. She’s okay with my son for now.
      I don’t think it will work with getting her own apartment. The language barrier is a big issue. We’ll probably have to move her to Thailand at some point. It’s a lot more affordable there. $1,000/month means a pretty nice retirement community with dementia care. I’ll have to check the price again.

  • Rick September 13, 2018, 11:40 pm

    Nice to hear Portland has made it too difficult to rent (much like California). This drives up rents and limits the supply of housing, as well as increasing building costs. For example, in my CA area, it’s $400+ per foot to build – all from ‘green’ regulations, etc.

    The liberals who infest Portland, Washington, California, and the East Coast deserve to suffer. Unfortunately, many of them are too rich to notice the horrendous effect their well-meaning meddling has on regular people.

    Try voting Republican next time.

  • Joseph Stevenson September 14, 2018, 5:17 am

    Dire need for some extra funds so that we could redo our home was the primary reason we sold our one and only rental property back in 2014. It was a great source of passive income because we had got some good tenants over the years since we moved into this new one, but the maintenance (it was a 3 bedroom bungalow) was too damn high, especially during the winters. So I think it’s up to each one of us to weight the pros and cons and decide. I don’t regret it, tbh.

  • Alberto September 21, 2018, 7:52 am

    Joe – Just read your article. Dealing with an elderly parent with dementia is an extremely difficult endeavour and time consuming. At some point you might consider putting her in an institution. Not a financial decision, but a lifestyle one requires courage and fore thought. It comes down to life priorities and accepting the inevitable IMHO.

    Now about the house, can you afford to sell the primary resident only and buy another property? You are young enough to do so.
    Condo and duplex are assets. Never ever liquidate your assets unless you are buying bigger ones. Its a trade between assets and cash flow. Your networth with and without should give you the picture.

    Good luck,

    Alberto

    • retirebyforty September 21, 2018, 9:59 am

      I’ll write more about this soon. Moving into a facility is going to be a big problem. She is already losing her English so it’ll be very difficult to communicate. We’ll probably have to move her to Thailand sooner rather than later.

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