We finally did our taxes this weekend, and after being scared we were going to get shafted pretty good, it turned out good for us. We sold our rental house last summer and everyone kept telling us how we were going to have to pay capital gains this and taxes that. Should it be this hard to do something that people normally do once in a while? We had no idea how it was going to turn out, and I don't think it should be that way.
We bought the house back in 1996 for about $92000. I did not want to sell it, but it was a pain in the ass every time we needed new people to move in. We mostly rented it to friends and although they didn't do the greatest job in taking care of it, at least they weren't in there punching out the walls either. The worst thing ever for rental property is freaking dogs. Since our friends took advantage of our generosity, I felt weird charging a pet deposit, since nobody moved in with pets. Funny how if there is no charge, eventually everyone goes to the freaking pound and gets a couple dogs.
I noticed at our friends house, now that they are living where a pet deposit is required they no longer have multiple dogs running around shitting up the place. It was one of those lessons we learned the hard way. It took me a couple new carpets replaced that I never called my own, but I guess, that's the life of a landlord. One tip of advice, as EVERYONE told us, don't rent to friends, and worse, people that Claudia recommends.
Anyways, we sold it for a pretty good profit, which is what scared us the most. The only good thing helping us was that we had plans to sell our current bigger house and so we put in more expensive carpet, and a new A/C and heater system, along with a new water heater. We spent close to $30,000 by the time we added all the painting and new baseboards and painting the outside and inside. When it came time to move, I had a bit of a panic attack at the thought of being a failure going back to a small house after attempting to be the "big man", and I told Wife I couldn't do it.
We got a random realtor, she was so random, she gave us her business card as she overheard us talking about houses while eating at Culver's. I am not sure she was a best fit for us, the house sold in less than three hours, but it was on the strength of what we did, she didn't even get to put a For Sale sign on the yard, it sold by her posting the pics on their website. At first we were being way conservative and we kept $20,000 in our savings, but I got the urge to get a new truck after we paid a bunch of debt with the profits, and so I got stupid and took $10,000 to use as a down payment and went and got an awesome new truck.
Anyways, we still had $8000 plus our Florida fund nearing $4000 and no idea about what the taxes were going to be. Because Wife did such an awesome job saving every receipt to Home Depot and Lowe's, we only had to pay $4200, so for once the IRS didn't screw us as badly as we were thinking. And yes, we bought the insurance through H&R Block, if there's a mistake, it is on them, so yeaih!!
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