Getting ready to sell our house
As part of our big move timeline, we plan to sell our investment property in the spring of 2024.
This is partly to prepare our finances for the UK spouse visa financial requirements and partly to simplify our assets/mitigate tax obligations so we aren’t selling two properties in one year.
We spoke to our Realtor (I feel very grown up to have a Realtor. Who am I??)
Anyways, she had some helpful info. We discussed a few details and here’s our rough plan:
Give our tenants plenty of notice
We’ll notify our tenants in January that we need to end their tenancy on April 1. They’ve been great tenants for the past three years, so we want to give them plenty of time to make new plans. The lease is month-to-month so it should be pretty straightforward.
Do a walkthrough and plan repairs
After we notify them, we’ll do a walkthrough with our Realtor so she can make a valuation. And we’ll schedule estimates to have the floors refinished and the interior painted. And note if there is anything else that needs fixing. We haven’t been in the house for three years so fingers crossed it’s not a disaster. I’m planning for around $6-8k in repairs and updates. We probably don’t need to do this (the house is in a great location and will sell as long as it’s priced correctly), but I really want to make the house appealing so we get lots of interest.
We’ll schedule repairs for April when the house is empty. As soon as everything is complete, our Realtor will do a light staging, which means adding little stuff to make it feel more homey, like towels in the bathroom and a jar of utensils on the kitchen counter.
Figure out some more easy staging
We’ll haul over a few of own things from our house that can fit into a small SUV and we can live without for a few weeks. Some chairs, a blow up bed with bedding, etc. It’s a small house (under 1,000 sq ft) and having furniture actually makes it feel bigger and shows people how functional the space is, so we want to make an effort.
Then we take pictures and write the listing. As soon as everything is ready, we’ll list the house. Hopefully at the start of May or sooner.
Plan for taxes and fees
Our Realtor is taking a 1.75% commission, which is awesome since I was expecting at least 2.5%. We worked with her to buy our current house and plan to work with her to sell both our houses so she’s giving us a discount. It pays to build relationships! I’m not sure what we’ll offer the buyers agent, hoping I can get away with 2.5%? We’ll see. The housing market has been weird in our city. Stock is so low, it doesn’t seem to matter what interest rates are, there are still more buyers than houses. We’re hoping this can work in our favor because real estate agents are desperate for listings, both to sell and to show their buyer clients.
We’ll also need to plan to pay capital gains taxes, which is not going to be cheap. These are taxes you have to pay on any profit you make on investment properties when you sell. It’s based on your income and profit (minus expenses like our real estate agent fees). I’m bracing for at least $30k in capital gains taxes. Yikes.
Say goodbye to our old house
And that will be it! It’s really bittersweet to end our landlord journey so soon. This was the first house we bought and lived in. Then when we bought a bigger house three years ago, we were able to keep our first house and convert it into an investment property. It was a big dream and goal of ours, and I’m really proud we were actually able to do it.
I keep going back and forth if we actually need to sell this house. On the one hand, it would be great to keep it for longer to keep building value and start earning rental income. (We never raised the rent and it’s under market value.) On the other hand, I don’t want to move to the UK and have to think about a house in another country. It’s extra hassle we simply don’t need.
Any profit we make from the sale of our house will help us meet the visa requirements and will eventually go toward the purchase of a new house in the UK. Properties there are sooo much more expensive per square foot, so we need every penny we can round up.
No turning back after this
This will be the first really big step toward our big move abroad. We’ve told a lot of our close friends and family about our plans, but it’s nothing that we can’t undo. Selling our house will be a permanent thing, and the first tangible step toward the big move. Gulp.
