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buying and selling a house?
we have just bought a house through auction and plan on putting a new roof on it and selling it. does anyone know if there is a time line on keeping the house before we sell or could we sell it without even putting a roof on it? we bought it from a real estate company on an online auction if that makes a difference. also it is in a different state so we would like to sell it asap.
Public Comments
- YOU HAVE TO OWN A HOME FOR A FULL 1 SECOND BEFORE YOU CAN SELL IT AGAIN.
Having said that, there is no guarantee you will be able to, and recoup your costs. You will also then have to pay tax on your gain at the regular income tax rate instead of the lower 15% capital gains tax rate (min. 1 year).
I would suggest running some numbers and price the home at a home run price. Put it on the market and see what the response is. Then either take it off the market and fix it up to sell later, or drop the price and dump it.
THESE ARE THE DECISIONS YOU HAVE TO MAKE BEFORE YOU BUY. ITS LACK OF CAREFUL PLANNING THAT CAUSE MOST PEOPLE TO FAIL IN RE INVESTING (or any other kind of investing for that matter).
- No legal time line on when you can buy and sell, but there will be income tax ramifications. If you buy a home and live in it, you must live there for at least 2 years in order for the proceeds of the home sale to be exempt from income taxes. If you buy a home and own it for at least 1 year, then you will still be subject to taxation, but you will qualify for capital gains treatment (15% tax instead of 30%+).
Some states may have anti-flipping laws that could scrutinize your transactions if you do too many deals where you buy at one price and then sell pretty soon afterwards at a much higher price.
- you can read about 1031 exchanges, where youcan sell immediately afte ryou own it and take the proceeds to invest in another place with no taxes.
