Ridgewood Homeowners Sell or Rent?

Decision points to walk through with the client:

1. Financial math

• Net sale proceeds (after agent commission ~5-6%, closing costs, capital gains exposure) vs. net monthly cash flow as a landlord (rent minus mortgage, taxes, insurance, maintenance, vacancy risk).

• Ridgewood property taxes are high (Bergen County) — factor this heavily into rental cash-flow projections.

• Compare expected rental yield (annual rent ÷ home value) against what sale proceeds could earn if reinvested.

2. Market timing

• Is the current market a seller's market (fast sales, prices near/above ask) or softening? Recent data shows mixed signals — some reports show price appreciation, others show slight declines with longer days on market. Local agent input matters here.

3. Ownership/landlord readiness

• Willingness to manage tenants, repairs, and vacancies (or pay 8-10% for property management).

• Landlord-tenant law exposure in NJ (security deposit rules, eviction timelines).

4. Life circumstances

• Certainty of return to Ridgewood (schools, job relocation reversibility).

• Need for sale proceeds now (down payment elsewhere, debt payoff, liquidity needs).

5. Tax considerations

• Section 121 capital gains exclusion ($250K single/$500K married) only applies if it's been a primary residence 2 of the last 5 years — a real deadline if they've already moved out.

• Rental income is taxable; depreciation recapture applies on eventual sale.

6. Risk tolerance

• Renting ties up equity in one asset and single-property risk; selling diversifies but forfeits potential appreciation in a historically strong Bergen County market.