Reply to Sell or rent out starter home?

Forum Index » Money and Finances

Reply to "Sell or rent out starter home?"

Subject:

Emoticons





More smilies

Text Color: Font: Close Marks

[quote=Anonymous][quote=Anonymous]Current home is worth $585k. Owe $90k on a HELOC. Looking to move up to something in the $850k range.

Option A: sell house (clearing $460k) and then get a $390k mortgage on new place.

Option B: tap current HELOC for $225k down payment and then get $625k mortgage on new house (which would then be conforming). I can rent the current house to an O4, which would be $3100/month. The new HELOC balance of $315k would be around $1500, and taxes and insurance is another $500, so I would clear $1100/month before maintenance. I would accelerate the HELOC balance as I have done the last few years.

Thoughts?  Suggestions?  [/quote]

There are various rules for deciding on whether to buy/keep an investment property (check out site Bigger Pockets) and those rules dictate that you should sell.  Also keep in mind expenses like finding tenants, mgmt company if you hire one, taxes on the rental income, vacancies, and your time.  Maybe estimate that you'll net $500/mo after everything else.  Is that worth it to you?  The times when I've had friends rent their starter homes in high COL areas and it made sense was when the home appreciated a lot in the rental period. That does happen, you know best whether your house is likely to do that.[/quote]

Options

	Disable HTML in this message
	Disable BB Code in this message
	Disable smilies in this message

Review message

Search Recent Topics Hottest Topics