Hello, have been lurking the forums for a bit , decide to make a post.
I have owned my house for a year now. Been renovating it to the point where I have somewhere around 30k in equity in the home. I currently live there along with 2 tenants paying the mortgage.
I have been thinking about moving states and wondering what would be the best option to continue my real estate accumulation . Should I continue renting my home out? If I were to move out I would have an extra 550$ a month coming in over my mortgage.
Or sell my house take the 30k and invest into the new city . What are some pros and cons? Or would I be better suited getting a equity loan and purchasing a second .. kind of lost at the moment . Any input would be great. Thanks !
Depends on your future goals . You could flip houses get paid in one sum and pay big capital gains or bring a lifetime of income in small increments with big tax incentives
Thanks for the response Dennis! I really do like the idea of holding onto this piece of property as the neighborhood really hasn’t had a true resurgence yet.
Any tips on securing a second real estate investment ?
Does the $30k gain account for sales expenses? Costs about 8% to sell a house the regular route. 10% by the time the inspection report and negotiations conclude.
If it's been at least 366 days, taxes shouldn't be a huge factor.
I am a passive investor, so Id probably keep it depending on how far away you're moving. If you have to get a PM and worry over it because too far away, I'd sell most likely.
If $30k is all of your seed money for the new place I'd sell if owned for 365 days. Good luck!
I factored in realtor fees at 8% so the 30k would be the total gain.
I was under the impression the selling before 2 years would be hit with capital gains?
I’m planning on moving about 5 hours away. But I considered property management.
Yes the 30k was my primary seed money for a new place. But then I wondered about equity loans on my house to fund the next property .. are the viable anymore ?
Hey Jim, if it were me, I'd want to hang onto it. I would network with other investors in your area and find out if any of them utilize property management. I own two places 2.5 hours away from me and I use property managers to manage those. Run the numbers and find out how much you'd be making, including property management fees and that will help you make a more informed decision.
You can definitely do a home equity line of credit or cash-out refinance on that property to fund another deal. Again, you'd have to factor that extra cost of the new mortgage to see what your cashflow would look like if you were to do that. I'm doing a cash-out refinance of my 3-unit property to fund the purchase of another property.
Best of luck!
The best time to buy real estate is Now
The best time to sell real estate is never
Or as the ancient Chinese saying goes
Best time to plant tree is twenty years ago
Second best time to plant tree is now
How much over your mortgage will you have coming in when your expences are 50% of your rental income. That number will tell you whether it is worth holding or not.
thanks for everyone’s input! It seems the common concencus is to keep the property for rental income .
Thomas , I’m not quite sure of your question. You mean how much money each month do I have coming in once my mortgage is paid? Around 550$
He’s asking about all the other expenses that go along with being a landlord.
Vacancy, insurance, property taxes, repairs, management...
Oh ok thanks for clearing that up. Yes 550$ is property tax insurance and mortgage factored . Luckily no repairs as of yet. I do have a small fund set aside for repairs though.
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