Hello, so I own a townhouse currently worth around the mid 300k range. The house is fully paid off, and I am now looking at moving to a single house in the 400k-500k ballpark. I’m weighing my options as to whether I should sell my current place or keep it as a stable source of income. The townhouse could be rented for around $3300-3500 furnished, but I would need to remove the following: • $550 for HOA • Taxes • Potential realtor fees (although I might be looking to list and rent myself). Overall, I’m looking at around $2500 of net profit monthly on the house. I have around $80k in savings I could use for a down payment on my new place, bringing my mortgage to around $3000. Should I rent my current place and use that money to pay my future mortgage or sell the property and use it to pay most of my future house? Thank you!
You should owner finance it out. I also know a lender who will purchase the house in full if they have a back-end buyer who will have 3.5% down plus closing costs to rent it out to them.
Wouldn’t that increase the risk of someone not being able to make the payment on the house and defaulting? It seems like the potential risks outweigh the rewards.
If you do the transaction wrong then yes. They need to be vetted if it’s owner finance. But there are a lot of solutions before it goes into foreclosure, so the likelihood is low if you know what you’re doing or have a realtor/company that does. You can always do the rent-to-own option where the lender purchases your home and cashes you out if they find a back-end buyer.
Interesting, thank you for the insight!
A $350k townhouse renting for $3300? Even fully furnished and renting to traveling nurses, that seems optimistic. I’d say 1031 otherwise?
Hey, prices where I live for rentals are pretty steep. Many townhouses like mine are going for $2800-3100 unfurnished. Could you expand on what a 1031 is?
The secret to real estate investing is holding on to the property.
Rent. Have someone else pay for the property.