One major factor in deciding whether to sell or keep 14 Carmens Drive as a rental is the tax consequence—and right now, the clock might be working against you.
Because the property is currently rented to your daughter and you live in Florida, 14 Carmens Drive likely no longer qualifies as your primary residence. That means you may not be eligible for the IRS’s primary residence capital gains exclusion, which allows homeowners to exclude up to $250,000 (single) or $500,000 (married) of profit from taxation—but only if you lived in the home for two of the last five years.
If you haven’t lived there since 2022 or earlier, and your daughter has been the sole occupant, that exclusion disappears. Which means any net gain on the sale is likely taxable.
Let’s run the rough math:
This is something you’ll want to confirm with your CPA before listing—or talk to a good financial advisor at least—but it should absolutely be factored into your keep-vs-sell thinking. If you sell now and owe tax, it’s a smaller, more manageable gain. If you wait and the home appreciates further, the tax bill could grow with it.
And keep in mind: Florida doesn’t have a state income tax, so this would be a federal-only capital gains issue—not double-taxed.
Whether you sell or rent, you’ll still be on the hook for annual property taxes—currently $8,640 per year, based on the 2024 Dover rate of $18.17 per $1,000 of assessed value. That’s a real cost that chips away at your rental profit and should be counted either way.
Right now, there are 15 two-bedroom, two-bath apartments for rent in Dover. Here’s what they’re asking:
If your daughter is renting the condo under market value (say, around $2,000/month), that’s an estimated $800–$1,000 per month in unrealized rental income—or nearly $10,000–$12,000/year left on the table.
If you’re collecting below-market rent from your daughter (or offering the space at-cost), the property may be emotionally valuable—but financially underperforming. You’re sitting on clean equity with no recorded mortgage. The question becomes:
“Do I want to hold this property long enough to make the rental returns outweigh a potential capital gains hit—or take the win now and put that equity to work somewhere else?”
If this sale is part of a larger transition plan—downsizing, relocating, estate structuring—selling sooner gives you liquidity, clarity, and flexibility.
And if you can still claim the capital gains exclusion? Then you’re looking at a full-profit, tax-free sale.
Either way, the equity is real. The only question is how—and when—you want to use it.