My family currently lives in utah county and my mortgage is 802.57 a month with taxes and escrow at a 3.75%. We owe about 133k on our home and we are looking into getting into a bigger house/ better neighborhood. We aren't planning on moving for at least a year, but we just want to gather as much information as possible. On zillow our house is estimated at 250k and rent is 1200 a month.
My goal is to get a good amount of passive income so we can be financially free and I figured that renting it out would be a good way to do that. But after looking at it, we could sell our house and put a good amount of money as a down payment and still have 10-20k left over to invest in other opportunities. Any advice would be greatly appreciated.
Rental Property Investor · St. Petersburg, FL · Member since 2017 · 3k+ posts · 4k+ votes
7y
@Jeffrey Walther I would advise against using Zillow to value your home. There are much more accurate ways to do it, and a good realtor could give you a more accurate assessment. Selling you home would give you tax free profits, allowing you to buy a better investment than renting your current home, but run the numbers. Maybe the cashflow would be great on your current home and a great investment. Having a really low interest rate is a huge advantage because your next mortgage will likely be 5+%, so figure that into your analysis as well....
Rental Property Investor · St. Petersburg, FL · Member since 2017 · 3k+ posts · 4k+ votes
7y
@Jeffrey Walther I would advise against using Zillow to value your home. There are much more accurate ways to do it, and a good realtor could give you a more accurate assessment. Selling you home would give you tax free profits, allowing you to buy a better investment than renting your current home, but run the numbers. Maybe the cashflow would be great on your current home and a great investment. Having a really low interest rate is a huge advantage because your next mortgage will likely be 5+%, so figure that into your analysis as well....
Your rent to home value is far too low. As a income property this will be a money pit. You will have negative cash flow after debt repayment and expenses. $400 per month to cover all expences is no where near enough. Sell.
Real Estate Broker · Provo, UT · Member since 2013 · 689 posts · 511 votes
7y
Keeping the home and renting it out is probably a decent option, depending on where the home is - however regardless where the place is in Utah County, rents are pretty ridiculously high. You will most likely pay substantially more than $802.57 to rent right now - unless you are living in a 1 bed 1 bath studio...
I made the mistake of selling my first house when I upgraded to the next - Had I not made that mistake I would have owned it outright by now... Keep it if you can.
Salt Lake City, UT · Member since 2018 · 219 posts · 182 votes
7y
You have several options. As stated above Zillow is not very accurate. You need to get an actual CMA done. You could keep your current property as a rental and buy a new primary residence FHA or cash out and buy a home and invest the extra elsewhere.
Hey Jeffrey. After going back and forth for about a year I got licensed as an agent so I have access to the MLS. I'd be happy to help you value your home and get a more accurate idea of what it might be worth. I think you really need to know that number before deciding what your course of action should be. Let me know!
Rental Property Investor · Lehi, UT · Member since 2015 · 25 posts · 23 votes
7y
Utah is a great market and one that in the long run will continue to appreciate nicely after this upcoming correction. You have a great rate and enough cash flow that I would hold on to this house as a rental for sure.
Investor · Draper, UT · Member since 2016 · 9 posts · 0 votes
7y
Rhett,
Send Kayden and myself your address and we will both give you a sight unseen range on your home based on comps form the MSL... 2 opinions are better then 1. I do this about 20 times a week evaluating properties. Best of luck
Investor/Developer · Salt Lake City, UT · Member since 2015 · 207 posts · 106 votes
7y
@Jeffrey Walther If Zillow was accurate (which might be a first), then keep the house and get a 70k equity line on it. Invest the equity line short-term. I'd do what I could to hang on to your 3.75% rate