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Real Estate

Should I sell or lease?

Many factors at play when deciding on rental property



sell or lease, gay news, Washington Blade
sell or lease, gay news, Washington Blade

Many factors are at play when deciding what to do with a rental property.

Last month I wrote about the question of renting vs. buying a home in Washington, D.C. In this column, I’ll address the other side of that equation—leasing out vs. selling a rental property.

Washington is a city with many small real estate investors holding one or two properties. Imagine that you’ve owned a rental townhome for a while that has suffered from deferred maintenance, and that now needs an overall facelift to continue being rentable. You’re trying to decide whether to spend $100,000 on renovation or to sell the property as is for its market value of $600,000. What should you do?

Let me first say that there is no absolute right or wrong answer to this question. Your decision will be informed by a number of factors:

Your current financial situation—how much do you need the full amount right now? Are you using the property for current cash flow? Do you have all the money for renovation or will you refinance with a conventional loan to get a $100,000 cash out or will you wrap your existing loan into a 203k loan (with the renovation cost built in)?

Your long-term financial situation—are you planning to use the property as part of your retirement, whether for cash flow or for a nest egg to sell?

Your tax situation—Do you need the property as a tax shelter? If you sell now, will you do a 1031 exchange or will you have to pay capital gains?

Your patience—Do you have the energy to manage a construction project (if only as the client of the general contractor) and all the many renovation design choices you will have to make?

From a purely financial aspect, the numbers are clear that you will do better to lease and hold rather than to sell and invest (unless it’s in another rental property). Let’s take a look at the numbers for a 15-year comparison.

First, let’s consider the sales scenario, which is quite simple: Let’s say you sell the townhome for the current market value of $600,000. With 8% selling costs (6% for brokerage fees and 2% for other fees, including the city transfer tax), that would leave you with net cash at settlement of $552,000. If you invested that cash in a fund paying 5%, after 15 years you would have $1,166,765.

Next, the rental scenario: For the sake of simplicity, let’s say you already own the townhome outright and you have the ($100,000) cash needed for renovation. Doing the renovation will take 3 months, so that means (3 x $2000=$6000) in lost rental income, but your renovated townhome will be worth $675,000, so let’s assume that you can now command $2700 in monthly rent for the renovated space. With monthly expenses and property taxes costing around ($1355), your monthly net operating income (NOI) is $1345. Let’s say that your monthly depreciation on your property is ($1818), which subtracted from your NOI gives ($473) in monthly taxable income. For a 35% tax bracket, that translates into ($166) tax savings per month.

If you invest your $1345 monthly NOI (income after operating expenses and property taxes) at a 5% rate of return, in 15 years you will have $359,525. Over the same period, you will have saved $29,805 in income tax. At that point, your rental property should have appreciated in market value to $1,426,750, assuming an average 5% increase per year. (For Washington as a whole, average sale prices have appreciated 6.4% over the 6-year period from December 2008 to December 2014.) In order to end up with a cash-to-cash comparison, let’s say you sell the townhome for market value at this 15-year point. With 8% selling expenses, that would leave you with $1,312,610. Adding together the 15-year value of the net operating income, tax savings, and net cash from the townhome sale—and then subtracting the renovation cost and lost rental income during renovation—you would realize a net gain of $1,595,941.

In this comparison, leasing and holding yield a 36.7% improvement over selling and investing. But remember, your circumstances may not be the same as those assumed in these scenarios. Your best option is to consult your tax adviser, as well as a Realtor knowledgeable in investment properties.

Happy hunting!



Ted Smith is a licensed Realtor with Real Living | at Home specializing in mid-city DC. Reach him at [email protected] and follow him on , or @TedSmithSellsDC. You can also join him on monthly tours of mid-city neighborhood Open Houses, as well as monthly seminars geared toward first-time homebuyers. Sign up at

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Real Estate

Helpful tips for homebuyers in seller’s market

2021 has been a great year for home sales



COVID-19 housing market, gay news, Washington Blade

Without question, 2021 was a great year for home sales. Sellers across the country, in many cases, found themselves listing their homes and quickly having not just one, but multiple offers, many of which were at asking price or above. With limited inventory and high demand, it has been an ideal year to sell—and conversely, often a difficult year to buy. Buyers who are interested in a particular home, or even in a specific neighborhood, often find themselves facing stiff competition to have offers accepted. 

Fortunately, this doesn’t mean that many buyers haven’t had successful and rewarding home buying experiences—just that doing so often means making an extra effort and taking helpful steps to make an offer the most competitive that it can be. With that in mind, let’s take a look at a few helpful tips for buyers in a seller’s market:

  • Plan ahead with mortgage pre-approval: While there are certainly a wide variety of strategies that real estate agents and financial advisors may recommend, and while those strategies might vary depending upon the buyer and the circumstances of a particular market, one thing almost all experts agree on is that obtaining a mortgage preapproval is a smart decision. A mortgage preapproval is an ideal way to reassure sellers that a reputable lender has verified your credit and approved your buying power up to a certain limit. If you’re caught in a bidding war with another potential buyer, having preapproval establishing that you are ready, willing, and able to buy just might give you the advantage you need in a competitive market.
  • Be willing to look under budget so you can bid higher: In this highly competitive market, many home buyers find themselves in a situation where they are in a bidding war with another—or even several other—buyers. In that situation, you may find yourself having to make an offer at, or even in many cases, above, the asking price. This means that you may want to adjust your budget—and bidding—accordingly. Choosing to make an offer on a home that has an asking price that is already at the top of your budget may mean that you simply don’t have much wiggle room when it comes to making an offer over that price. Choosing a home slightly under the top of your budget means you’ll have more flexibility to make a bid that is more competitive and likely to be accepted.
  • Consider offering non-price-oriented incentives: Without question, making a highly competitive offer is going to be the key to increasing your chances of having that offer accepted. It’s important to remember that there is more to an offer than just price, however. Buyers may want to consider increasing the appeal of an offer by supplementing it with other incentives beyond just the dollar amount itself. Examples of such incentives might include things like foregoing the seller-paid home warranty that is often offered as part of the process, offering a shorter closing period, not making the purchase contingent upon the sale of a currently-owned home, or other such incentives. Doing so may give you the edge you need to have your offer selected over other competitive bids.
  • Retain the right real estate agent: Often, for LGBTQ buyers, especially in a competitive market, this piece of the puzzle is particularly important. In many, although certainly not all, cases LGBTQ buyers are drawn to specific areas of a city or community where other LGBTQ individuals live. That means that in a market where inventory is already limited and going quickly, there can be even fewer homes available upon which to bid. When that is the case, you will need a real estate agent who knows the community that you’re interested in, and who can quickly help you identify and take action toward making offers on homes that fit your needs. Having the right agent can make all the difference between a smooth and successful home-buying experience, and a stressful one

Jeff Hammerberg (he/him/his) is the Founding CEO of Hammerberg & Associates, Inc. Reach him at 303-378-5526, [email protected] or

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Real Estate

Help, I’m under contract!  They accepted my offer?!

Buyer and seller need to work as a team



What are the most common questions real estate agents, title companies and lenders get once a client is under contract? Well, luckily on my team we send out a next steps letter to all of our clients once an offer has been accepted and this helps them to know what to do the first week, the second week, and in any subsequent weeks before the settlement.  

For example, the letter will go out and say, “Make sure to get your EMD check to the title company in the agreed upon amount of time.” The EMD is your earnest money deposit, and most contracts have a buyer write a check for several thousands of dollars that will go the title company as sort of a “security deposit” on a contract that later gets applied to the buyers’ closing costs.

The letter will also instruct a buyer to contact their lender and confirm with them that they are under contract and to get the contract over to the lender so they can start preparing the loan and order the appraisal. The letter also states that later in the process the buyer will get the wiring instructions from the title company where settlement will be held for the down payment money. If there is to be a home inspection, we will also get that scheduled, usually in the first week after going under contract also.  

If selling, the letter is a different one with information about moving companies and getting any staging out of the listing. Both parties will receive instructions on how to change the utilities from the seller to the buyer the week of settlement. The title company will also follow up with the buyers and sellers to get any needed info. They will ask any questions necessary to possibly help the buyer to get any deductions or credits they might qualify for that could lower their closing costs. A good lender will do this also.

What each buyer and seller needs is good teamwork to make the dream work whenever a house is changing hands and a large transaction is going to be handled. For more information, you can contact me to attend my next Homebuyer’s Seminar on Oct. 12 in the evening, which will be on Zoom.  

Joseph Hudson is a Realtor at the Rutstein Group of Compass. Reach him at 703-587-0597 or at [email protected].

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Real Estate

Jenn Smira Team fighting to make world a better place

Join us in the fight against cancer



Elvin Merlo is boxing on behalf of a friend who died of brain cancer.

At The Jenn Smira Team, we don’t just talk about making the world a better place, we fight to make it happen — literally. Case in point: this fall, Elvin Merlo (one of our very own agents) has been selected to fight in the Haymakers for Hope Beltway Brawl. What does that mean, exactly? On Nov. 4, Elvin will compete in a three-round amateur boxing match to raise money for cancer research. Read on to learn more about Elvin’s fight and the cause that compelled him to step into the ring.

A little bit about H4H: Haymakers for Hope is a 501(c)(3) charity organization that gives all of us the opportunity to fight back against cancer. The organization helps others like Elvin train for — and compete in — a sanctioned charity boxing event to raise funds for cancer research, care, awareness, and survivorship. To prepare for each event, they combine the efforts of local boxing gyms and volunteers, and match each contestant up with someone of a similar experience level (even if that experience level is “none”).

The H4H History: In 2009, H4H founders Andrew Myerson and Julie Anne Kelly participated in the New York City Golden Gloves, one of the most highly regarded amateur boxing tournaments in the U.S. After the lights went down, they realized that something was missing, and decided then and there to channel their fighting spirit to raise money for cancer research instead. This planted the seeds for Haymakers for Hope. Today, H4H gives people just like you the once-in-a-lifetime opportunity to compete in their first-ever sanctioned boxing event while supporting a worthy cause at the same time. The experience is impactful, challenging, and life changing, and the march toward a cure continues long after the last match of the night.

Why Elvin Fights: Elvin fights for David Black, his dear friend who recently passed away after a nearly seven-year battle with brain cancer. He was only 33 years old and left behind his wife, Jen, and two beautiful children.

While it’s nearly impossible to capture John in just a few words, the ones that might do it best are perhaps: “I want to be like John when I grow up.” It’s a phrase that his father, John Sr., could often be overheard saying and a sentiment the rest of his family would all be quick to echo.

John was a force. He loved his family and friends above all else and radiated a quiet resolve that comforted those around him. He faced adversity with unflappable courage and never missed an opportunity to elicit a smile with his wry sense of humor, no matter the hardship he faced.

John truly embodied the warrior spirit, which is why Elvin knew there was only one way to honor him: to fight. That’s why on Nov. 4, he’ll step into the boxing ring and join 27 other fighters for a three-round sanctioned boxing event while raising money for cancer research, care, awareness, and survivorship.

Fundraising Specifics: Elvin is raising money for Dr. John Laterra’s research at John’s Hopkins Kimmel Cancer Center. Dr. Laterra oversaw John’s treatment, and is internationally recognized for his clinical expertise and research on the mechanisms of brain tumor malignancy.

Compass Cares empowers agents and employees alike to support meaningful causes right where it counts most: at home. Compass has already pledged $15,000 to support Elvin in his fight against cancer. 

Will you join the fight? Visit to make your donation today.

Jenn Smira is a Realtor and executive vice president at the Jenn Smira Team. Reach her at 202-340-7675 or via

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