So I have an interesting situation. I am currently a home owner which is undergoing relocation for work. I am moving from Miami, FL to Jupiter, FL.
Current Property has market value of Approx 480k. and is PAID OFF. I am thinking I should be able to rent out for about 3000 and have monthly expenses of 1300, so a cash flow of about 1700.
I am getting into a new mortgage on a new property, and am expecting Mortgage/Tax/Insurance ~3500 per month. I am contemplating if I should rent my original home and use the cash flow to help pay mortgage or sell and pay off my new home, or very close to all and decrease the burden of Interest on my new purchase.
My relocation has some benefits: No Seller fees on home sale. If home sells for 480 I get a check for 480 (no comisson or anything etc.) I can get a Primary Residence tax break too.
I think you can find a higher and better use of your equity than renting your $480k house for $3k/month.
I would sell the current house since the price to rent ratio isn't very good, put a down payment on the new house instead of paying it in full and then use the remainder of your cash to start acquiring more properties.
Of course it all depends on your personal goals but this is what I would do if I was looking to start building a portfolio.
$480K in equity invested at a return of 10% (opportunity value) is worth $4000/month. With rent at $3000, which is way to low based on property value, you will be losing (negative cash flow) $2300/month on your money. OUCH!!!!!!!!!!!!! IT is time you learned the value of your money.
Hi @Daniel Ramos The Miami market right now is HOT. I would definitely sell and purchase my new residence and get the tax breaks as well as use the extra income to acquire multi units for positive cash flow. Good luck.
^^^What everyone else has said. In addition, why would you leave the behind the commission that your job is paying to sell your home? That's $28,800 that you are leaving on the table.
I would sell and acquire a few properties that cash flow.
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