Question: What prompted you to sell your rentals? Or, under what circumstances do you intend to sell your rentals in the future?
I retired a couple weeks ago, due to the sale of one of my businesses. At this time, nearly half my net worth is locked up in real estate equity. I do not need that equity right now to live on, as I have enough in cash and bonds to last for several years. My current plan is to sell rental properties as necessary to replenish the piggy bank, which would be every 4-7 years at current property values and lifestyle burn rate. I own enough rentals to be able to do this well past my expected lifespan.
I have already taken depreciation recapture tax, capital gains tax, NIIT, costs of sale, etc., into consideration in my calculations.
Some other sell-off triggers that I've contemplated:
- The need for long-term care arises.
- A massive bond crash decimates my securities portfolio, causing me to not want to sell bonds to pay expenses.
- Virgin Galactic or Blue Origin tourist flights fall below $250k in price (yes, I'm serious...see recent Antarctic trip thread).
Again, I don't want to debate the merits of rental properties as an asset class, that is already done quite thoroughly in other threads. Please keep this to the financial and retirement planning aspects of what would trigger a property sale for you.
As always, many thanks to this amazing community!