Hello, I am 25 and currently have an FHA loan on a 1400 sq foot 2 bed/1.5 bath town home that I occupy. payment is just shy of 600 a month with PMI and Escrow. Im looking to buy a home with my VA loan soon. My question is should I sell, refi or rent my current townhouse. average selling price in my neighborhood is 105k for the same sq foot but with 3 bed 2 bath. average rental rate is right around 1,00-1,150 a month. I currently owe about 86,000 on the loan. If I refi into a va loan it will make my payment under 400 a month not including taxes and insurance. what is your recommendation ?
@Mike Bell the answer lies more in your long term goals than in these numbers. It sounds like the house will cash flow fine. Do you want a portfolio of sfr's? I personally chose to flip my home in Riverside, IL because I wanted to get into the multifamily game. If you have lived in the place for at least two years you can take the proceeds tax free, which is the best way to roll your equity!
If your long term goal is to own a bunch of houses, I would say hold onto it. Use whichever loan product makes the most sense long term. You won't be able to pull the FHA 3.5% down strategy for ever anyways.
@John Warren has a good point. Figure out what avenue you want to go down. Multi family or just buy another SFH. Also check your association to see if you can rent your townhome. Some associations don’t allow it. And if they do allow it make sure it’s not based on the fact that the property needs to be underwater. If you can refi then your property is not underwater so just double check you can rent it out. Townhomes are really hassle free so you would have less overhead renting it out. Plus the income from renting out plus the cash you could pull out coupled with a live in rental(duplex/4-plex) is a recipe for increased purchase power in 2 yrs. if you go the SFH route having the rental would still be a nice caveat. I have a townhome rental and hardly hear from them outside of 1st of the month. Assuming your association is solid and the townhome is in good condition. Hope this helps, good luck, and action happen!
That’s what I’m not sure about is the oath I would like to go. I can rent my townhome out, about 30% of the Homes in my neighborhood are rentals. I haven’t been able to find any decent deals on a duplex in my area, and I’m not sure if the cost to build one but it could still be an option. I also have a solid lead on a 12 acre plot of land with a dilapidated home on it for a good price, just not sure about which direction to go in.