In these dim days of foreclosures and sub-prime crisis, it is very rare for anyone to have a real estate windfall. But it is still possible if you have property that has appreciated very much during a very short period. If you are the owner of one such property then you have various options of encashing it.

If you feel that you want to sell it and invest that money elsewhere or even pay off your pending loans, it is a good idea. The problem is that if you sell the property in a short time from purchase, you will be eligible for capital gains tax, which is 15% on whatever profit you make on that sale. That could be a lot of money going out in taxes. If you are comfortable paying those taxes then go for it. Also calculate if the property is going to appreciate as dramatically as it has done now, in the future. If it is, then it is better to hold on to it.

If you have a stand-alone home or apartment, you could rent out the property. But again this would make sense only if rentals have also appreciated. That way, you could still have a fixed monthly income. If you feel that rentals are rising rapidly, then do not sign up for a long-term lease. Instead go in for a shorter lease period, so that you can increase the rentals after that lease has expired. Again, note that the income you earn from the rentals will be taxable.

If you have a plot of land, then you could also build your house on it. You could get a tax benefit upto 500,000$ within the capital gains taxation scheme. You could also take a loan on that property and whenever you find another property, you could exchange your old plot for the new property. This move also does not attract any capital gains tax.

The best move would be first to get in touch with your tax attorney or any qualified finance planner. He will be well conversant with the current tax laws and will be able to guide you better in the correct path to be taken. Since different states might have different property laws, you will need to be prepared about your tax liabilities before deciding on your property. If you are thinking of moving to another state or country permanently, then selling it off is a better option, since you can close off all your other loans, just take the balance money and move on. In this case, giving it on rent also does not make any sense since you would have to travel a lot if any problem crops up.

Ultimately, you will have to decide on any one of the above options. If you feel that you are getting much more than you had imagined even after paying all taxes on selling the property, then go for it. Anyway you look at it, you are still sitting on a goldmine. It is upon you to decide whether to sell the gold in it or make jewelery out of it.