Buying a new (preowned) and Renting my home- NEED ADVISE PLS!!

5 Replies

Hi BP members,

I live in an SFR right now but have been looking for a home in a nearby community (great schools, neighborhood in North Dallas) where I have a lot of friends in the same community. Recently a home was listed in the same community we are interested to purchase the home, but given the nice neighborhood the price is higher ($700K+). If the new home works out for us, we would also would like to rent ur current home we live in and put it on the market for lease. I spoke to a few property management firms and said that the rental market is "hot" and can lease my home in 30 days (my home is 15 yrs old, also in good neighborhood with great schools 10/10).

Question:  Would it make sense to take the plunge in this volatile market and buy a pre-owned home and rent our existing home? Or should we wait for market to come back to normal (whenever that is) and then look to take the plunge (may or may not have this home in market).

The only reason we are so interested in the neighborhood is that we can live with our friends and for our kids to have company of their age kids in the community and the same great schools. There are only few homes in the small community that come to the market for sale.

We’ve been fighting hard to resist the temptation to go with the home, but also avoid any risks as possible given the current crisis we are all in.

Requesting all experienced investors and home owners to provide some thoughts and advise here!!

Much appreciate it BP team!

Thank you!

Sri

 


My hot take is that if you are spending $700k for a home in Dallas or anywhere in TX you are buying a luxury that you can't count on for stable pricing.  If you are spending that much on your next home I'd wager your current home may also be somewhat of a luxury home and thus not a great investment, you'd probably be better off selling it then buying a rental or rentals for investment if you decide to purchase the new luxury home.

Thanks Aaron. My current SFR is on the lower end of the market $400K and this will be an upgrade for us. What are your thoughts in that market value for rental properties?

@Sri Chakravarthy it of course depends on what kind of rent you can get, but that price range is pushing it for my area, and I'm in a more expensive area with lower property taxes.  Given that in Dallas County alone there are 1700+ SFRs for sale right now under $300k there are probably better options.

I’m also in the same position right now in North Dallas. We decided to sell now and rebuy in a nicer neighborhood in 6-18 months after the economy stabilized from COVID-19. If we can’t sell by then, we will be renting it out. Is the home in Frisco? 

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

We hate spam just as much as you

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here