To Buy or Sell First

Fredericksburg, TX has long been a popular spot for vacation home and recreational ranch buyers.  There are; however, many instances when a buyer new to the Hill Country is purchasing a new primary residence.  When this is the case, it is important to figure out whether to buy the new property or sell the old real estate first.

If they have the financial capital to invest in a new home, it may be a wise choice to buy before selling the existing home in order to take advantage of the increased deductions and savings on taxes at the end of the year. Not everyone; however,  is going to be in a financial position where they are capable of maintaining all of the financial responsibilities of owning two households at the same time.

Listing the current home with a qualified realtor will often produce better results for the average person. By selling the current home, they are released from any mortgage payments or other financial obligations in respect to that house. They will also come out ahead financially if they have managed to build up any equity in the value of the home.

This added boost to their discretionary disposable income is known as a capital gains income. There is usually a two-year period in which they can reinvest that money without being penalized on their taxes at the end of the year. That additional money can then be used to assist with the cost of living in a rental unit while the real estate investor seeks out a new ideal piece of real property where they can safely reinvest their capital gains.

Whether to buy a new home or sell the old home is going to depend on the financial portfolio of the individual real estate investor. As a general rule, if the financial means are available, then purchasing a new home first is often the best choice. Since that kind of financial freedom is not available to everyone, the reality of the situation is that for most real estate investors, it will be wise to find a good realtor and sell the old property before purchasing a new home.