Is there any advantage to buying small and reselling w/i year?

[tiggerlover]

As many of you know we are moving this summer and DH will be retiring not long after that. Since we don't know what kind of job DH will have after retirement and I will be going on leave without pay just before we move (GS position) we won't be able to purchase the type of house we want right off. We have been looking for short-term rentals (6 months) and in the size that we need they are just either non-existant or too small. However, we have noticed that there are some nice townhomes for sale that would suit our needs short term, we could even stay a year so DS could finish school. But is it worth it (or doable) to buy a townhouse and turn around in a year and sell it, or should we just keep looking for a rental to show up that will work for us?

 

[WhenUwishUponAstar]

have you thought about buying something to use as rental property once you decide to move again??

 

[tiggerlover]

Originally posted by WhenUwishUponAstar
have you thought about buying something to use as rental property once you decide to move again??

No, we haven't even thought about that. And I very much doubt that DH would want to go that route. But it is something to think about.

 

[marlasmom]

I don't think prices are going to go up as much this year and when you consider the costs of buying and selling - real estate commissions, tax stamps, all the various closing fees, appraisals (the list is endless) it is very hard to make a profit or even break even in a year. JMO

 

[The Mystery Machine]

I would look for the rental. There is always the chance it won't sell and then you are stuck. Right now about 100 homes are for sale in the 3 neighborhoods connecting here. I never would have believed that people can't sell. But it is happening.

 

[Christine]

I agree with marlasmom--depending on the area and how well it is appreciating, it may very well be too hard to recoup the realtor fees (6% of sales price) and all the associated closing costs in a year. You might be lucky just to break even. If it were 2-3 years, I'd say to go for it. One year is just a little too risky.

 

[tiggerlover]

Thank you.

Being a military family we have been moving often in DH's career so we have never bought a house, so this is foreign territory for us. I am just worried about the lack of short-term (larger) rentals available. Hopefully everything will work out okay in the long run.

Thanks again!

 

[Doug123]

There are tax implications for selling within two years (at least in my state of Michigan). I'd look into that aspect as well.

 

[Hillbeans]

Yes, 2 years of ownership is the minimum I believe anywhere for capital gains tax exclusion.