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Big financial decision I want to be smart and need real advice.

Thread in 'Finance / Investing' started by bulletpaluza, Apr 11, 2020.

  1. bulletpaluza

    bulletpaluza The Hen that laid the Golden Legos Supporter

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    So I am building a new house that will be ready in just a month or so. I have a house on 4.5 acres that I only owe 100k it's worth if sold is about 250k.

    Am I better off selling my house and throwing my equity at the new house. Or should I hold onto my current house and rent it out?

    To be clear I can afford both mortgages but dont want to carry 2 because who does? I am only 31 and want to make a smart financial decision that could impact my future the best. When it comes to money risks I tend to error on the side of caution and take what I can now. But it 10 or more years my current/future rental house could be worth 300k+ and be paid off. Even if the market tanks again it will always he worth more then I owe.

    What say you ODT keep and rent or sell and have a tiny new mortgage?
     
  2. StuP

    StuP The Hen that laid the Golden Legos Supporter

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    Do you want to be a landlord ?
     
  3. Psilloh1

    Psilloh1 The Hen that laid the Golden Legos

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    I say:

    • Sell the house
    • Take the cash and invest it
    • Take mortgage on on new house
    • Interest rates will never be lower.
     
  4. roydamnmercer

    roydamnmercer Frontiersman Supporter

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    I’d sell. Renting really only works if you buy a distressed property with little equity or have several/multi family style homes. You may get lucky once but generally speaking, renters will trash your nice house and it will lose value quickly. You have great equity and that’s nice but no way that house is still worth $250k in a couple of years of renting. If you chose to be a landlord, set your mind that you will have headaches frequently and you will lose faith in humanity.

    On the other hand, if you have a sought after location or views...airbnb might be a viable option.
     
  5. Convoy

    Convoy If the wheels ain't turnin' - you ain't earnin'.

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    I am a big advocate for keeping your debts low. So my initial thought is to sell now and pay down the new home loan. That will pay off in many ways in the long run. If the market was going strong like last year, that would help you sell faster and for more money. If you can sell now for a great price, then do so.

    But in the current economic situation....you could keep both for now. Once the housing market returns to normal values, then sell it. My concern is that you wouldn't get top dollar now, but you probably will next Spring. I'd expect some pent up demand to add to the normal Spring selling season (Mar - July) in 2021.

    Personally I wouldn't want to be a landlord either, but I know there is money to be made that way. Just don't want the hassles.
     
  6. Spas-12 Owner

    Spas-12 Owner The Hen that laid the Golden Legos Supporter

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    This. Understand this. You are not above everyone else. It could suck.

    IMO rental property is nice if you have 4 plus units, anything else is a hassle and not worth it.

    If I was you. Depending on the condition of the 4.5 acre property I might rent for a year then decide if you liked being a landlord ( You won't).
    If the first house is in prime condition and updated I would sell now though.
     
  7. Stuckon22

    Stuckon22 Look a Man Straight in His Hairy Eyeball! Supporter

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    Sell it, pay down on your new home loan. At 31, you could be debt free of a mortgage at 46. Being a landlord sux. Being debt free is exhilarating. No longer a slave.
     
  8. The Old Jaybird

    The Old Jaybird The Hen that laid the Golden Legos Supporter

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    Clark Howard would advise you to take a deep look inside and see if you are cut out to be a landlord. Have you been a landlord before?

    Can you deal with bad tenants, phone calls at 2am that the toilet is leaking? All the other headaches. But, the financial rewards are great if you can get a good tenant. Best deal might be rent with option to purchase by tenant.
     
    bulletpaluza and Convoy like this.
  9. 4ssss

    4ssss Survivalist Supporter

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    I agree
     
    Lancekl, bulletpaluza and Convoy like this.
  10. bulletpaluza

    bulletpaluza The Hen that laid the Golden Legos Supporter

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    It's super secluded in the woods no view most people want on vacation.
     
    Spas-12 Owner and DinkyDau like this.