What Would The Guru Do?
Here is my situation I am not sure if I should hold on to my current home and rent it while buying another. Current home paid 470k worth 700k (its soCal) and the new one is 840k. I could just sell the current and buy the new or do something creative (get rid of my current 6 percent fixed 30 and pull equity to buy the other). If you were in my shoes what would you do, I feel like taking on some risk and want more properties etc and value the advice on the board.
thanks
steelbhund
If you were to rent the old house how much could you get per month?
I agree with commercialking - you need to know what you can reasonably expect to receive in rent.
But one thing i can personally attest to; tenants do not care for your home like thry would if they owned it. We tried the strategy you are considering about 15 years ago and my wife threw an absolute fit with the way to tenats kept the home. I believe it is different to rent ones home (even former honme) than to have 'rental' perperty. If you can live with a tenant's general lack of long term concern for your home; at least cover your expenses (including some allowance for maintenance), and want to have rental property, then rent it.
otherwise, I'd sell.
after investigation we would easily get 2500 per month (why people pay this I dont know) and after refi we will be at 2000 per month for payment so we should be good cash flow wise, you are right about being more attached to the house though.
$2,500 x 12 months=30,000 per year. If you sold at 700K that would be 4.2% cap rate. Sell this house, take the money and do something more profitable even if thats only paying down the principle balance on the new house which has to be costing you more than 4.2% Even better would be to invest it with a cap over 10%..