What would you do?

Situation:

We own a 2 family in new hyde park. The upstairs tenant just moved out and so far we havent been able to rent it out- 2 weeks.
The living room is kind of small and i think that is the reason it is not going.
We currently live in a 2 br in floral park and pay 1200 a month, no utilities.

DH and I were thinking about one of two things: either staying in the current apt we are in and expand the living room in the rental home which would mean ripping out a bathroom (there are two in the apt) and taking down one wall - while doing this though, we would be paying not only for the repairs, but 1500 extra a month to cover that mortgage.

OR, we can give notice in the apt we are in and move into the rental apt - save the 1500 a month, but live there while we do the repairs.

the repairs will take about 2 monthsssss - Dh, my dad and uncle will do all the repairs after work and on weekends.

We know that when the apt is finished, we can get at least 1500 a month for this apt.

What do you think?
Thanks!

Re: What would you do?

i would stop paying rent and do the work around me. that's just my opinion though..that way you can save some money..good luck!!

Re: What would you do?

So you would move out of the 2 family home once the repairs are done?

Since it's a 2 famiy why not stay on 1 floor and rent the other rather than rent from someone else?

But to answer your question if $ is an issue Id move into the 2 family while repairs are being done, but if I had the extra $ Id probably just stay in the apt you're in now, cuz Id be lazy to move and then to move again 2 months after the repairs are done...

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I agree, I would move to the 2 family that you already own until you are ready to move into a house. GOOD LUCK!

Re: What would you do?

You would move in even if it would cost more--

right now we are paying 1200 a month.
if we move there we would be paying 1500 a month plus all utilities.

If we keep it vacant for 2 months, we would have to pay the extra 1500 for 2 months (hopefully)

and then charge 1500 a month for rent while still living in the other apt.

HELP!!!

Re: What would you do?

Stop paying rent!!!!!

Re: What would you do?

If you stay in your current apartment and renovate the rental property you own, then you are losing $3000 at a very minimum, assuming you can rent it right away for $1500. That's the equivalent of the difference in rent between your current apartment and the rental property ($300/month more) for 10 months. So financially, I think what you need to consider is:
1 - can you reasonably renovate the apartment and re-rent it in 2 months?
2 - how long before you are able to buy a home?

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i agree, thanks for the advice!

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I would definitely move back into the 2 family. From a tax prespective, the property taxes would only be tax deductible if you lived there. So you are currently paying rent $1200 and renting it for $1500. The difference would not be as much as $300 if you figure in the tax savings from being able to have the tax deduction.

Plus technically you have to report the rental income so that maybe putting you into a higher tax bracket. So there is an additional savings there.

Secondly, if you plan on selling the 2 family, you will more than likely have to pay capital gains tax on the difference in sale price. Although I am not 100% certain, my understanding is that if you live in the home for 24 months or more, the impact would not be as much.

Maybe someone here could clarify further. Or you can contact your accountant.

Re: What would you do?

when i purchased the home i purchased it as a primary residence, so i am able to deduct the taxes.

my thinking right now is, if we start repairs this weekend, we could be done in under 2 months.

if i give my landlord notice on sat- that is a months notice, by the time it is time to move out, we will be 75% done with the work and able to start showing it.

so what then, i would move out of that apt only to want to move again?

Or do you think we should do the renovations and then stay there until we are ready to buy another home?