Hey all! My wife and I just had twins, so now we have 3 kids and need some family help, so we’re looking to move. We bought a house almost 3 years ago.
Facts:
Own a house in Boulder County, CO
Moving to Maryland
Mortgage is ~$3600/month at 3.25%, 30-year fixed, $648,000 out of $689,000 remaining
Single income is $175k
My job is flexible and remote, so income should stay stable
Options:
Move and rent out the current property: Rent is around $3,100, but we’d need property management since we’d be out of state. Our income might be too high for tax benefits from rental property until it’s sold. We’d sell other assets for a modest down payment on a smaller house or rent.
Move and sell: Current mortgage rates make buying a downgrade, and I’m unsure if we’d get back a down payment. Zillow estimate is around $770k, and assuming 10% costs to sell, that leaves $47k in profit for a down payment. Seems optimistic and I’m afraid of being without a down payment.
Move and hold: We can live with my wife’s parents for 3-12 months and hope the market improves, or sell and use that time to save.
I’m afraid of losing a large asset by renting it out, but I’m not familiar with rental properties. It seems risky to have a net negative rental property and I’m looking for advice on whether selling is the better option. Happy to answer questions in the comments. I’m no finance wizard, just trying to set and forget where possible.
Sell. The negative cash flow from renting and out-of-state property management headaches aren’t worth it. Your 3.25% rate is nice but doesn’t outweigh the monthly losses and hassle. Take the equity and use it as a down payment in Maryland. Property management will eat up potential appreciation and you’ll be stressed managing from afar.
@Chen
Thanks for the reply! That’s how I’ve been feeling, and it’s nice to hear someone else thinks the same. I hadn’t considered out-of-state ownership complexities beyond a management company.
Wade said: @Chen
Thanks for the reply! That’s how I’ve been feeling, and it’s nice to hear someone else thinks the same. I hadn’t considered out-of-state ownership complexities beyond a management company.
I had a similar situation and chose to sell. It was the best decision I made.
I don’t deal with rent-to-own because of buyer’s remorse. Most make money because the sale doesn’t close. The tenant cancels before the end, and it goes back as a new rent-to-own for the next renter. Standard renting is better until you can buy with a mortgage.