Would I be insane to ever move?

[Anonymous]

I want to stay in my current area, definitely stay in the same school zone. I just wish I had an extra bedroom and if it were ever possible, I'd love to have a SFH instead of a townhouse.

The reason I feel like it would be stupid to sell and have to mortgage a new place is because I got a great deal on my interest rate. It was an FHA loan and there's no way it could get any lower. I'm not a high earner and will be paying a mortgage until I retire or close to it. So the interest rate is something that will always be a factor.

WDYT? Am I stuck with this townhouse?

[Anonymous]

How about rent it out?

[Anonymous]

If you decide to rent it out, become a landlord intentionally - read books, read the laws, do your "due diligence." Then go for it! We own 5 rental properties and it's the best business around if you go into it with eyes open and your "t's crossed." Especially if you're NOT a high earner - 20 years down the road when it's paid off by your tenants, you can either use it as a source of income or pay it and put a nice little sum into your nest egg. Do NOT count on the income in order to pay a higher mortgage somewhere else - you need any extra income that property kicks off to pay for the inevitable and constant repairs, vacancies, and improvements you have to make over the years. Make sure that you can charge more in rent than you have to pay in mortgage - at least 25% more to cover those inevitable expenses.

Income rates are very low right now - both historically and in recent times. If you search the market until you find a small enough house that you are comfortable with the payment (ie: don't jump at the first house you love), you may find yourself able to afford it. Can't hurt to look around, right?

[Anonymous]

I don't think renting it out is an option. I can not afford to pay rent or a mortgage where we I live on top of the mortgage at the house. I would be depending on the income from tenants and I know its possible there could be a gap in between tenants. I also couldn't afford the upkeep of 2 properties

I'm assuming that the suggestions to rent out means selling is not a good idea?

[Anonymous]

Anonymous wrote:I don't think renting it out is an option. I can not afford to pay rent or a mortgage where we I live on top of the mortgage at the house. I would be depending on the income from tenants and I know its possible there could be a gap in between tenants. I also couldn't afford the upkeep of 2 properties

I'm assuming that the suggestions to rent out means selling is not a good idea?

I suggested renting it out because you said your interest was low which means your payments are currently low so you can rent it out for an amount that is higher that what you are currently paying. My suggestion is to rent it out for a year, go rent a place where you want to move and see if it is doable. if it is, buy a house when you are ready, otherwise you can always move back to the old property. I think it is less risky than just straight out selling it without really knowing where you will end up

[Anonymous]

The IR is low but payments are still high (for me). The low IR allowed me to get more house but the payments are about 40% of my monthly income. So long as I was guaranteed to get the rent every month I could handle it, I'm afraid to take the plunge in case the tenant were to skip out on rent. It would be a good plan, I'm just afraid of the risk

[Anonymous]

Don't sell. Don't be house poor. That would be very hard!

[Anonymous]

Anonymous wrote:Don't sell. Don't be house poor. That would be very hard!

+1

[Anonymous]

Anonymous wrote:Don't sell. Don't be house poor. That would be very hard!

Thanks..I agree. The only way I would buy something else is if it was still in my budget. So it would probably have to be a smaller place given the IR will be higher.

[Anonymous]

Is there anything you can do to get more space in your TH, ie finish a basement, repurpose a formal dining room?

[Anonymous]

Anonymous wrote:I want to stay in my current area, definitely stay in the same school zone. I just wish I had an extra bedroom and if it were ever possible, I'd love to have a SFH instead of a townhouse.

The reason I feel like it would be stupid to sell and have to mortgage a new place is because I got a great deal on my interest rate. It was an FHA loan and there's no way it could get any lower. I'm not a high earner and will be paying a mortgage until I retire or close to it. So the interest rate is something that will always be a factor.

WDYT? Am I stuck with this townhouse?

Yes you would be insane...you are barely making it happen with your mortgage in the house you are currently living in. What happens when you property taxes increase which in tuen increases your mortgage amount? You said that your payment is currently 40% of your income. What happens if you had an emergency?

[Anonymous]

There are huge transaction costs to selling and buying that can eat up all the appreciation in your house. Don't do it - instead, invest a couple of thousand dollars into revamping storage in your house to make better use of your space.

[Anonymous]

OP, owning a SFH is not all it's cracked up to be, either.

[Anonymous]

I would stay in the townhouse.

[Anonymous]

Something that helped us in a townhouse was to de-clutter. Got rid of everything that we did not need or use.

SFH has a lot more expenses such as yard work, higher utilities, etc.