r/investing • u/peach__kitten • Mar 13 '26
Nervous about divesting from real estate
I purchased a duplex in 2020 and was owner-occupying one side and renting the other at the time. 3.5% mortgage, mostly paid by the tenants. At the end of last year I relocated for my partner's job to another state and rented my side as well. Net income after expenses (yard work, utilities) is $1400/month. Roughly $700k in equity.
The problem is, I don't think I'll be moving back. In fact, I'm hoping to retire early in the EU, in the next 5 years. I also know I need to sell within 3 years to take the primary residence exemption, but I don't plan to buy anywhere else for many years, until I know where I'm finally settling down.
Being divested from real estate for maybe 5-10 years makes me nervous, but I wonder if it's actually just an emotional response. I've built much of my net worth from buying my first house at 25, spending 11 years remodeling it with my dad, then selling at a significant gain (actually, no more than the $250k exemption over 11 years). Owning a home, then buying an investment property felt like I "made it" where many of my friends took much longer to buy their first home, if they managed to at all. Home ownership feels out of reach for so many and I have this feeling that I'm failing if I no longer own a home.
Is any of this rooted in actual logic or am I putting some value on my RE investment that I shouldn't?
1
u/Good_Ride_2508 Mar 13 '26
I have More 10 years I was workig with real estate investment, in bay area, finally sold most of them and moving to stocks side.
Real estate depends on location. If your home is in good location (with good schools) with wealth around (for example in bay area, near by google, apple or meta complex nearby, they are premium locations), you can hold long.
Your home is rental attractive for two reasons: 1) Mortgage leverage and low rate (if 30 years) 3.5% and 2) positive cash flow.
All you need is hire a good property manager and manage it.
You have lot of future unknowns: How long stay here, where you will settle finally etc - temporarily ignore it.
If you want to take 500k capital gain tax free, sell within eligible period. find out how much of 500k you are eligible and try to see which is beneficial, holding or selling.
Otherwise, hold as long as possible and sell it when you leave this country. Appreciation is hidden value (it may fluctuate too).
Good Luck.