This regularly-scheduled sponsored Q&A column is written by Adam Gallegos of Arlington-based real estate firm Arbour Realty, voted one of Arlington Magazine’s Best Realtors of 2013 & 2014. Please submit your questions via email.
Q. Our house in 22207 would be considered a teardown. We may move in a year or so when my husband retires. Our question is: would it be better to do some remodeling and then rent it out for a few years to benefit from possible future appreciation, or better to take advantage of the current developer demand and sell? Of course it will depend on specific details of the house, the neighborhood, and other family considerations, but do you have a general suggestion?
A. Cash in or let it ride… This is the classic question of gamblers and investment owners. In this case I’m inclined to advise you to cash in. Here are three reasons why:
- Alhough I have confidence in the direction of our real estate market, there is no guarantee that the current level of demand for tear down properties will continue. In the current market, you may be able to orchestrate a bidding war that will outperform what your property will return during more conservative times. Many builders are buying with their own cash and they have been burned by past markets. I imagine that the slightest hint of slowdown in the luxury market will directly affect the demand for teardown properties.
- You have mentioned remodeling the home before renting it out. This is going to require investment in the home that is not going to provide any value to the person or developer looking for a tear down. Your investment will become a sunk cost that eats into the additional profit you hope to gain by holding onto the property longer.
- You’ll want to carefully explore the tax implications of holding the property. For example, renting the property out for too long can create substantial costs in the form of your capital gains tax.
If you were my client, I would provide you with an estimated sales price and strategy for the current market. I would also do my best to project the appreciation or depreciation you may experience by holding onto the property. This exercise would help you make a decision based on the unique value and estimated performance of your home. You can compare these numbers to the estimated costs of holding on to the property as a rental.
The views and opinions expressed in the column are those of the author and do not necessarily reflect the views of ARLnow.com.
Rosslyn Station Evacuation Last Night — From Dave Statter: “@ArlingtonVaFD arriving minutes ago at Rosslyn Metro confirming haze of smoke in the station & checking for source of the problem….
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Arlington is poised to take a proverbial weed whacker to commercial properties with overgrown lawns and all properties with obstructive vegetation. Last month, a proposal to change the ordinance pertaining…
Meet the beautiful Koda, a glass half full kinda dog who searching for his forever home.
Let the Arlingtones surprise your friend or sweetie this Valentine’s Day with a barbershop quartet singing love songs in four part a cappella harmony! Choose from a small selection of songs in our repertoire to surprise your special someone.
$75 for two songs delivered to a place of your choice by a live, in-person quartet. Includes a classy tin of chocolates, fresh red rose and personalized card. Small mileage surcharge for >5 miles outside Arlington VA.
$30 Facetime/Skype valentine- two songs delivered ‘live’ via Facetime or Skype at an agreed-on time.
$20 virtual valentine- two pre-recorded quartet songs delivered via email with a personalized message.
Have you noticed a striking sculpture at Monroe Street and Wilson Boulevard? It’s the Museum of Contemporary Art Arlington’s newest installation, Make Your Mark, by Arlington artist, Adam Henry. This sculpture celebrates MoCA Arlington’s rebranding and brings the museum’s energy outdoors.
On February 11, come inside when the museum’s galleries reopen with two new exhibitions: Rebecca Rivas Rogers: Grey View and Crisis of Image.
Grey View, in the Wyatt Resident Artist Gallery, is an homage to “gray” and a snapshot of the artist’s process. Consisting of photographs, collage, and a site-specific installation, this show is an outgrowth of Rivas-Rogers’ visual investigations into places you see on your way to somewhere else.
On the main level, Crisis of Image features artists who seek equity in today’s saturated visual world by developing new methods related to the production of images.
Valentine gifts for someone special or for yourself are here at George Mason University from noon -4pm on February 14, 2023. Satisfy your sweet tooth with Kingsbury Chocolates, find a handmade bag from Karina Gaull, pick up treats from Village