to sell or not to sell

There is so much speculation about this market that there will never be a solid answer

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Posted by Sasha96

I would find out how the capital gains tax effects you. It may not be worth it to sell yet. I think if you want to look for a house you should see how much mortgage you could carry with the downpayment you have (w/o selling the coop) and what kind of house t hat would buy you in the area you want. It would be great for you to keep the coop and rent it while having the house. What are your coop's rules on renting?

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There is actually a stipulation in your co-op contract that the owners must live in the unit and cannot rent. Our lawyer told us that when we almost bought there. We were in the same boat lately, but though ours went up $60,000 in a year, we didn't find any decent homes for under $400,000. So, it would still have been a much larger mortgage for us.

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Posted by nov04LIbride

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Posted by Sasha96

I would find out how the capital gains tax effects you. It may not be worth it to sell yet. I think if you want to look for a house you should see how much mortgage you could carry with the downpayment you have (w/o selling the coop) and what kind of house t hat would buy you in the area you want. It would be great for you to keep the coop and rent it while having the house. What are your coop's rules on renting?

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There is actually a stipulation in your co-op contract that the owners must live in the unit and cannot rent. Our lawyer told us that when we almost bought there. We were in the same boat lately, but though ours went up $60,000 in a year, we didn't find any decent homes for under $400,000. So, it would still have been a much larger mortgage for us.

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my complex? i'm able to sublet as long as there is approval from the board.

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Posted by anjerandunder

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Posted by nov04LIbride

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Posted by Sasha96

I would find out how the capital gains tax effects you. It may not be worth it to sell yet. I think if you want to look for a house you should see how much mortgage you could carry with the downpayment you have (w/o selling the coop) and what kind of house t hat would buy you in the area you want. It would be great for you to keep the coop and rent it while having the house. What are your coop's rules on renting?

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There is actually a stipulation in your co-op contract that the owners must live in the unit and cannot rent. Our lawyer told us that when we almost bought there. We were in the same boat lately, but though ours went up $60,000 in a year, we didn't find any decent homes for under $400,000. So, it would still have been a much larger mortgage for us.

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my complex? i'm able to sublet as long as there is approval from the board.

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Sorry, I thought you were in Sherbrooke, which is all owner-occupied. that's the one we looked at. I actually just called Merson Management company (516) 681-6986) to double-check because I thought it may have changed but they said it remains 100% owner-occupied. Maybe they are changing it but whoever answered the phone said she didn't think so.

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Posted by anjerandunder

so we bought a co op a year ago and it has gone up in value so we could use the money for a down payment on a house but....do we keep it as extra income and sublet it while we purchase a house without much down or do we sell it and use it as a down payment. will the value of houses go down and then we won't be able to sell it in a few years? what are everyones thoughts?

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I am in the same situation... and decided to sell for a few reasons.


- The money from the co-op sale would make a nice down payment (in my case 20%)... which would help me make much stronger offers on houses compared to the people making small 3-5% down offers.

- My co-op charges me sublet fees that add up to about $1000 a year (every year its being rented)

- Any rental income made from the co-op is taxed since its a legal apartment... so in reality i am netting less than just the money i get from the rental

- Being a landlord is not for everybody... and dealing with a malcontent tenant is one of the worst things you can deal with (legal PITA as well)

- When you do eventually sell it... you will pay capital gains tax on it regardless of living there or owning it for at least two years. You always pay capital gains on any property thats either investment, secondary, or vacation. The gains law exemption only applies to selling your 'primary residence' only. (EDIT - I may be wrong with this... the law may state that you only had to live there for at least two years and then sell... but in your case you would not have lived there for two years anyways... so you would have to pay the tax - talk to an accountant to be sure).

Obviously it is nice to have a rental property... but its also not for everyone.

You shouldn't have to worry about not being able to sell it in a few years cause theoretically if you want to rent it... you should rent it for the long haul. By the time you need to sell it (maybe 10-20 years down the road)... you should owe much less than its worth at the time (easy sell).

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Posted by DjPiLL

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Posted by anjerandunder

so we bought a co op a year ago and it has gone up in value so we could use the money for a down payment on a house but....do we keep it as extra income and sublet it while we purchase a house without much down or do we sell it and use it as a down payment. will the value of houses go down and then we won't be able to sell it in a few years? what are everyones thoughts?

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I am in the same situation... and decided to sell for a few reasons.


- The money from the co-op sale would make a nice down payment (in my case 20%)... which would help me make much stronger offers on houses compared to the people making small 3-5% down offers.

- My co-op charges me sublet fees that add up to about $1000 a year (every year its being rented)

- Any rental income made from the co-op is taxed since its a legal apartment... so in reality i am netting less than just the money i get from the rental

- Being a landlord is not for everybody... and dealing with a malcontent tenant is one of the worst things you can deal with (legal PITA as well)

- When you do eventually sell it... you will pay capital gains tax on it regardless of living there or owning it for at least two years. You always pay capital gains on any property thats either investment, secondary, or vacation. The gains law exemption only applies to selling your 'primary residence' only. (EDIT - I may be wrong with this... the law may state that you only had to live there for at least two years and then sell... but in your case you would not have lived there for two years anyways... so you would have to pay the tax - talk to an accountant to be sure).

Obviously it is nice to have a rental property... but its also not for everyone.

You shouldn't have to worry about not being able to sell it in a few years cause theoretically if you want to rent it... you should rent it for the long haul. By the time you need to sell it (maybe 10-20 years down the road)... you should owe much less than its worth at the time (easy sell).

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You don't pay capital gains on a property you sell after owning it for 2 years if you use the profit toward the purchase of another property. I just sold my co-op after owning it 2.3 years and did not have to pay anything.
ETA: I used the profit towards the purchase of a house.

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Posted by IrishBride-05

You don't pay capital gains on a property you sell after owning it for 2 years if you use the profit toward the purchase of another property. I just sold my co-op after owning it 2.3 years and did not have to pay anything.
ETA: I used the profit towards the purchase of a house.

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Actually... you don't pay the tax if you live there for two years period. You don't have to 'flip it to another house'.

But the OP states that she hasn't lived there for two years yet... and if she wants to convert it to a rental... she will have to pay the tax even if she sells it 10 years down the road cause it will be considered investment.