Should I sell rental property?

[Campy1]

Hello,

My sister and I share ownership of a house that gives us each approximately $500/mo after expenses (house was paid off in 1980). This California house has been in the family since 1970, was purchased for $45K and is now worth around $300K. My concern is that the house is getting very run down, tired and could be in need of much work. Up until now it has only needed a carpet and paint but now the roof is starting to leak, carpet is damaged again, paint is needed inside and out, etc. The problem is that neither my sister or I have much extra money to put into the house so should we think about selling it?
Also, the house transferred to our name when the house was worth around $300K so I don't think taxes would be an issue??
Any help here would be appreciated.

[lorraineb]

While there really isn't enough information to give you an accurate opinion, from what little you havve said, yes. if you don't have the money to upkeep the property properly (that is what a portion of the rent you have been receiving should have gone to), then you should sell.

[Rainbow Traveller]

When you’ve invested in a good property which is probably a cash cow – don’t sell it. However, if you perceive that the value of your property is depreciating or will depreciate soon, then go ahead and sell. But make sure this isn’t just based on a hunch. Also if you bought a property to make some quick money by selling it in a few months time, this also justifies a sale.

[JustBill]

What will you do with your 50% share, or ~150k, to generate $500 per month income?

[Petunia 100]

Hello,

My sister and I share ownership of a house that gives us each approximately $500/mo after expenses (house was paid off in 1980). This California house has been in the family since 1970, was purchased for $45K and is now worth around $300K. My concern is that the house is getting very run down, tired and could be in need of much work. Up until now it has only needed a carpet and paint but now the roof is starting to leak, carpet is damaged again, paint is needed inside and out, etc. The problem is that neither my sister or I have much extra money to put into the house so should we think about selling it?
Also, the house transferred to our name when the house was worth around $300K so I don't think taxes would be an issue??
Any help here would be appreciated.

You are correct that your basis is the value when the house was inherited, however you have to consider the depreciation recapture. Look over your past income tax returns to see how much depreciation has been claimed.

If you and your sister don't want to properly maintain the home, then yes, you should sell it. If you let the house fall into disrepair, the value will plummett.

[Petunia 100]

What will you do with your 50% share, or ~150k, to generate $500 per month income?

That's easy. 6k is 4% of 150k, the standard rule of thumb for safe withdrawal rate. Invest in a nice 60/40 mix of stocks and bonds and let the monthly withdrawals begin.

[Copper]

I think you should not. You not gonna get a lot of money in this rescission. You need to wait and look for a better deal.

[swapnil]

I don't think you should sell your house, if you are not able to upkeep the house, you may rent it and earn some rent from it and save the same for renovating your house, and you may stay with parents at their place till the period you accumulate some amount from the rent to renovate your house, I would suggest you to plan out the expenses that you will require to upkeep the house in better condition and then plan for arranging of it in some ways.