Skip to main content

Should I Sell Or Should I Rent?

Trying to determine what the best wealth creation decision will be?

Situation: Were just about to finish closing on a new upgraded home (B) to live in, however still own our first home (A). We are debating renting out or selling home A. Were not sure if the wealth creation from renting home A is worth becoming a landlord.

Stats: Home B: $1.5M, with 20% down, at 6.7% ARM (7 years).

Home A: Market value $625k, $405k and 27 years left on the mortgage at 3.15%. Property tax $8k, HOA dues $600\year, insurance $1.7k\year. Its a 30 year old home where weve already made some maintenance investments (new roof, new appliances). Not expecting major repairs, but lets assume $6k\year at 1% of the home value?

Option A: Based on comps, we should be able to rent our home out for $3800-$4200\month (good school district, low inventory for single family homes in the area). We would eventually sell once our equity gets higher, interest rates drop (which we believe will trigger a higher purchase price easily +5-10% over current value). No idea when that will be. We would definitely use a management company to start

Option B: Sell home NOW and put $200k equity cashout towards our new home to help save on the 6.7% interest rate (we considered investments like tbills and bonds, but avoiding the 6.7% seems smarter and safer).

About US: relative High stable income couple (600k+\year), strong cash equivalent reserves, 2 kids. Limited free time, and really wonder if renting out is the right decision for us. While the numbers may indicate renting out (maybe), not sure if its worth it.

Thoughts?

submitted by /u/anonthrowaway012s
[link] [comments]

source https://www.reddit.com/r/RealEstate/comments/17stkt5/should_i_sell_or_should_i_rent/
Labels:

Comments

Post a Comment

Popular posts from this blog

North Carolina – “One to Buy; Two to Sell”

I realize I will likely have to contact a real estate attorney but also hoping to hear insights and experiences from others! I have a house in NC that I bought by myself in 2009, and paid off, in full, in 2022. I got married in 2023. My spouse and I have not lived in the house as our "marital residence". We have maintained separate residences even after we got married. (That a separate topic!). I am now selling this house. Realtors have told us that my husband has to sign the deed at time of transfer but I am not convinced since the house has not been our marital residence. The realtors like to use the phrase "one to buy; two to sell", which seems like a broad-stroke statement which is not applicable under all circumstances. And of course, the realtors don’t realize the details of my specific circumstances: I purchased and paid for the house in full prior to marriage Only my name is on the deed And most importantly, we have never lived in the house as a marit...
Post a Comment
Read more

Aren't comps/CMAs useless with buyer credits at close happening now?

I'm looking into buying a new construction townhouse in my HCOL US city. I'm seeing builders offering interest rate buydowns worth $20k-$60k on $800k homes (rather than just lowering prices) in order to keep their comps high for their other units, now that buyer demand has been declining. I asked my agent about these, and he said these buydowns aren't even the full story: buyers can write all kinds of other credits into an offer, like their closing costs, prepaid sewer fees, etc. Apparently cash buyers can just write in a "buyer credit at close" for any amount in their offer. So a new townhouse that appeared to sell for $800k in the MLS might have actually been a cash offer with a $100k+ buyer credit at close, meaning the buyer only spent $700k or less in total, but to the rest of the world they can only see the $800k! So that made me realize I can't trust comps/CMAs for other new construction townhouses. The sales prices could be way lower than they appear...
1 comment
Read more

Co-signing as non-primary resident - effect on size of required downpayment & first time home buyer status?

Contemplating co-signing on a house with my mom and splitting the mortgage payment. I currently have a significantly higher income and much better credit than her. I'm looking at potential home costs and related downpayments but have difficulty using some of the online estimators. From my perspective, this would be somewhat of an investment purchase (I intend to stay in my current location in a different state and contribute to the mortgage), however, for my mom, this would be a primary residence. For purposes of the downpayment size and the type of mortgage arrangement, would it be an investment property or a primary residence? Many thanks for any help. submitted by /u/piercalicious [link] [comments] source https://www.reddit.com/r/RealEstate/comments/km4hvl/cosigning_as_nonprimary_resident_effect_on_size/
Post a Comment
Read more