Jeni VanOrnum | Real Estate Insights & Education

Congratulations—you’ve outgrown your first home! I’m Jeni VanOrnum, your Douglas County real estate agent, helping move-up buyers decide whether to sell or rent their current home when upgrading.

The Big Decision

As you prepare to buy your next Douglas County home, you face a critical choice: sell your current property or keep it as a rental investment? This decision impacts your finances, taxes, and long-term wealth significantly.

Reasons to Sell Your Current Home

Selling provides immediate cash for your next down payment, potentially allowing 20% down to avoid PMI on your new home. You eliminate the responsibilities and risks of being a landlord—no tenant issues, maintenance calls, or vacancy concerns. Your debt-to-income ratio stays lower, qualifying you for better terms on your new mortgage. You avoid the complexities of managing an investment property while adjusting to your new home.

Reasons to Keep It as a Rental

Real estate is a powerful wealth-building tool. Monthly rent can cover or exceed your mortgage payment, building equity while tenants pay down your loan. Douglas County rental demand is strong in communities like Castle Rock, Parker, and Highlands Ranch, especially for well-maintained starter homes. Long-term appreciation in Douglas County has been historically strong. Tax benefits include deducting mortgage interest, property taxes, insurance, maintenance, and depreciation.

Financial Analysis Required

Calculate potential rental income versus all expenses including mortgage, property taxes, HOA fees, insurance (higher for rentals), maintenance reserve (1% of property value annually), property management (8-10% of rent if you hire professionals), and vacancy allowance (typically one month per year).

Can You Qualify for Two Mortgages?

Lenders have specific requirements for investment properties. You’ll need strong credit (typically 680+), low debt-to-income ratio (usually under 43% including both mortgages), cash reserves (6 months of expenses for both properties), and only 75% of projected rental income counts toward your qualifying income.

Tax Implications

Selling your primary residence offers capital gains exclusion ($250,000 single, $500,000 married) if you’ve lived there 2 of the last 5 years. Rental properties face capital gains tax when sold, though 1031 exchanges can defer taxes if you buy another investment property.

Make the Right Choice

Ready to discuss whether to sell or rent your current Douglas County home? Contact Jeni VanOrnum today for personalized analysis.