First post, starting out (kinda)
Hello BP!
Just recently joined after starting to look more into acquiring more properties with the aim of eventually being able to replace my current income with rental income. I'm in the Triangle area in NC.
I have actually been a landlord for a couple years now, having rented out my existing house in Carrboro/Chapel Hill when my partner and I wanted to move to Durham so she could be closer to her job at the time. I purchased the first house with part of a life insurance payout so the mortgage was low enough that it was worth more to us as a rental than just selling it. I've lucked out with tenants & haven't really had any major issues, currently on my second set of tenants. The rental income from this house currently covers half the mortgage on the house in Durham, which we financed 100% (may not be ideal, but it's worked out so far).
So here's the part where I ask for advice from the BP community: Given how well the Durham market has done in recent years, we have seen pretty decent appreciation on our house (purchased for 215k 2 years ago, now valued at 295k, hopefully 300k or more next year). We are considering putting the house on the market next year, & hopefully getting close to 300k. We are currently thinking about a couple different things to do with the proceeds:
-Refinance our first, currently rented house to get a lower monthly payment & move back in to it. This looks good to me because my partner would like to go freelance soon & this would significantly reduce the monthly bills we're responsible for, limiting the risk of her launching her own business. The house could also use some updates & it would be easier for me to do while we are living in it since I could work at my own pace and do much of the work myself. When we turn around and rent it out after moving again, we'll get more monthly cashflow thanks to the lower mortgage payment.
-OR, take the proceeds from the sale of the Durham house and invest in another property, one we could live in, fix up then potentially rent out as well. Our current rental (Chapel Hill/Carrboro house) does need some work, but nothing terribly urgent that can't be done with a tenant in place. The mortgage just went up a bit due to property taxes--$711 & it is rented for $1400, which I plan on raising $1500 when the current lease is renewed. So the cashflow isn't bad as it sits now. I figure if we get another property, it will be easy to get a mortgage since we will live in it for at least a year and my credit is excellent, we can fix it up while living in it, then we can move on to another property and rent it out--hopefully with some good cashflow since we will have put a large down payment thanks to the equity from the Durham house. This option has a bit more risk with my partner trying to launch her own business soon however, but it seems to me may yield more monthly cashflow in the long run, not to mention building equity on 2 properties rather than one.
SO...those are the two strategies we're currently looking at. Just looking for some thoughts, advice, tips, etc.
Thanks!