Skip to main content

Big new home purchase... help whether to sell or rent current home (newbie investor)

We live in a desirable HCOL area (CA) and have a very affordable payment on our current home. However, we found an amazing place that better suits our family's needs and went for it. We've decided to buy, that's not in question. Here’s the dilemma - what to do with our current home.

- Current home: worth $2m, $800k equity, all in payments $5k/mo (at 3.5%), estimated rent ~$7k/mo

- New home: $2.5m with ~$15k/mo payment (which we clearly afford but still gives us heartburn)

We’re buying without contingencies and have other ways to come up with down payment. Almost all of our NW is currently in stock, so it's probably a good idea to diversify even if we didn't buy this house. The two options I'm considering:

- Sell and pay down the high interest mortgage (recast) in our new house by another ~$800k

- Keep and rent it, cash flowing up to $2k/mo and enjoy potential future appreciation

The idea of lowering our $15/mo mortgage would help me sleep better at night. However, the idea of giving up a valuable property that cash flows with such a low interest rate seems like it may be foolish. I’ve never owned a rental property and am not opposed to being a landlord longterm, but it is counter to the objective of trying to simplify our lives with this move.

Our goal is to retire early in the next 5 years and we're well on that path even if this purchase sets us back slightly. I'm not a finance whiz or a real estate guy, so I would love any advice based on the situation above. Huge thanks to all I’ve learned from here!

TLDR: we are buying a bigger family home and need to decide what to do with our current house - sell now or keep and rent it - in order to keep on track to retire early

submitted by /u/Competitive_Pass8370
[link] [comments]

source https://www.reddit.com/r/RealEstate/comments/18jl7je/big_new_home_purchase_help_whether_to_sell_or/
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