I’m in the process of selling an out of state property that has appreciated well but is stressful to manage from afar. If sold without a 1031 exchange I’ll be paying capital gains on roughly 600k and I’m already in a high tax bracket.
Obviously it would make sense to roll over the proceeds, but I really don’t want to deal with multi family real estate anymore, so am looking at condos and sfh in my area. That being said the cap rates are abysmal, and at best I’ll be covering the expenses at worst I’ll be shelling out 1000s a month to pay loans and taxes (IL area…). I am definitely am not in a position to cover that easily.
I’m pretty stuck on what to do… should I consider buying a cheaper property that would be easier to cover the expenses of if renting it doesn’t pan out and shield some of my tax gains?