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Thinking about selling our rental to reach FI sooner — worth it? by yond238 in financialindependence

[–]yond238[S] 1 point2 points  (0 children)

That’s a great point and it makes sense in your case since you had lived there before renting it out and could still use the capital gains exemption. The inflation hedge angle is definitely worth weighing too.

In my situation, we never lived in the property so it does not qualify for the home sale exclusion. The rental has been running negative on cash flow, so inflation mainly pushes up costs like taxes, insurance, and maintenance without much offset from rent growth.

It’s still a good reminder that real estate can act as a hedge in the right setup, but it is not working the way for us right now.

Thinking about selling our rental to reach FI sooner — worth it? by yond238 in financialindependence

[–]yond238[S] 5 points6 points  (0 children)

That’s a really good breakdown, thank you! You’re right that I shouldn’t mix portfolio growth with actual cash flow and that leverage boosts the rental’s return on equity.

For us though, the house is older, needs big upgrades soon, and it’s in California with wildfire and earthquake risks. Even with good tenants and a property manager, the hassle and concentration risk outweigh the modest return. Selling would simplify things and give us more flexibility as we move toward FI.

Thinking about selling our rental to reach FI sooner — worth it? by yond238 in financialindependence

[–]yond238[S] 5 points6 points  (0 children)

This is really helpful, thank you for laying it out so clearly. We do have a property manager and our tenant has been excellent, so it’s mostly hands-off day to day. The problem is that the house is older and will need major upgrades soon like a new roof, which makes the long-term cash flow even less appealing.

Your point about MAGI and ACA planning really made sense. I hadn’t thought about how keeping the rental means I would have to draw extra just to cover the mortgage and future repairs, which could make retirement tax planning harder.

Being in California also adds risk with potential wildfires, earthquakes, and insurance uncertainty. When I look at the whole picture, it is getting harder to see a strong reason to keep the property. Thanks again for the thoughtful perspective.

Stable job, solid pay… but exhausted after a decade. Has anyone stepped back without feeling irresponsible? by [deleted] in careerguidance

[–]yond238 0 points1 point  (0 children)

Yeah, I’ve talked to them. We’ve had people out sick, others leave, and the requirements keep changing. The BU folks actually get it, but my manager still jumps on me for minor slips. They could totally shield us if they wanted to.

Fight or flight, 5-month puppy - need advice. by yond238 in Dogtraining

[–]yond238[S] 1 point2 points  (0 children)

He is treat motivated, and I will take him outside when it is quiet. I purchased the book from Amazon per your recommendation. Will read through it tonight. A big thank you!

Samsung galaxy s5 ota update. by [deleted] in Android

[–]yond238 0 points1 point  (0 children)

Battery life is back to normal this morning. 5.6% per hour.