In my area I could get 1/3 more home right now do to the current market conditions. My questions is, what options do I have to get into a new home and keep my current as a rental?
I bought the home before I got into RE and bought at market pricing. I bought for 200 and since I’ve only had for a year still owe about 200. My current mortgage including insurance and taxes is 1600. In my area I could rent for only 1200. Ideas? Thanks…
You can either sell it (which you have stated you DON’T want to do), or you could refinance it to try and get the payment as low as you possibly can. That is a pretty large spread though between $1,200 and $1,600. What does your current loan look like? Rate?
You’d be pouring money into that house every month, why in the world would you want to keep it and rent it? ??? $1000+ in expenses above the rental income…not a good move at all. If you want to upgrade sell the thing but certainly don’t try to use it as a rental. Rentals are to generate cashflow, not the reverse.
I want to keep it only because its in a hot area. If I can’t rent it now I guess I’m just stuck here until I complete some rehabs and refi to make the mortgage below the rental rate. Does that strategy at least make sense? Thanks
You’d have to see some pretty serious appreciation (see also explosive) to justify those costs out of pocket every month and for me I’d only hold something that cashflows or at least breaking even if I was waiting around for prices to come up.
When I said i would refi, I ment with a huge chunk down from the rehabs. Hope that makes more sense
Maybe its just me but I’d rather use that money for more rehabs that generate a lot more cash then tying it up in a downpayment on a cashbleeding rental. How hot is this market? 5-10% appreciation per year…oh boy there’s your kid’s college fund. Not trying to be harsh but it sounds like a losing idea. If you do one similar size property as a rehab you’re looking at a roughly $50,000 profit if you’re buying right and managing your expenses correctly and you’ll see that money in less than 6 months. So why not use that cash, do some rehabs and instead of seeing only 10% per year ROI go for the gold and see a much higher %?