Own our primary resident, should i sell or keep.........

14 Replies

My wife and I live in Las Vegas, we purchased our house (primary) in 2010 and we just paid it off,  purchase price was 155k,  it got appraised at 340k.  

Our goal now is to buy rental property, (mainly looking at duplex in Salt Lake City UT.). We have been pre approved for 500k.

Main goal is to have cash flow from investments to be able to buy a long term house (utah). My goal was to rent in Las Vegas (live/work) since we both make a good income here and buy one rental property cash(duplex) and find another rental property (duplex) and finance it.  

But we both like knowing not having a mortgage payment is nice, but then we will be getting into another payment anyways.   

We are just both scared and excited as well.  We know if we do nothing things dont change but we own a house but then we can take a chance and get property either by selling and buying a couple or start with one from just financing.

For the ones that have been in a situation like ours or just for you all that have a lot of experience what would you recommend us to do?

A) sell our primary residence (paid off) rent where we work, and buy rental property cash and finance another rental property?

B) stay in our primary residence (paid off), and just finance our first rental property and save and get another one in the future?  

Updated about 1 year ago


Your third option would be to take out another mortgage on your primary residence with a better interest rate or a HELOC. Otherwise, if you finance the rental you will need to put 25% down and pay a higher interest rate. That way instead of paying rent, you are just paying down the loan and reaping the appreciation on that house if you want to sell later.

If you’re going to get any financing you “have” to start with a mortgage against your primary, that’s the cheapest money you’re going to find.

You know the Las Vegas area, do you have local contacts or experience with the Utah area you’re looking at? Without that I’d caution against long distance investing in an area you don’t know. 

Assuming you do know it, or you are 100% positive you want to live there and are willing to receive less than optimal investment get the refi and buy one, try it out and wait before buying the second. 

Ps. I don’t want that line to sound like the 100’s of posts saying that isn’t the best use of your money or the “perfect” investment. My only out of state investment is in MN where I plan to spend summers when my wife stops working. It’s not a great investment but I wanted to lock in my location/costs. 

@Jeffrey Kim - It sounds like you have some good options, nice job on paying off your primary home that fast! It might be worth talking to some lenders and getting some numbers from them. I would see what kind of terms you could get on a HELOC or a cash out refi. You have a lot of equity just sitting idle that you could put to work. I would take advantage of the low interest rates and get some cash out of it to put to work. You could even look at scenarios of how the terms change if you do different LTV ratios to see what you feel most comfortable with. Good luck in whatever direction you go.

I am local to SLC so if you ever need someone to go drive by a property for you or get some feedback on your analysis or anything let me know.

Hey Jeffrey, welcome from a fellow Vegas Investor - great job on paying the house off! i agree with option three, keep your primary residence but look into a Heloc or Cash out ReFi, i just received a offer from a lender to do a 3.25% 30yr refi, you wont find any cheaper money, that way you can keep paying down the loan and reap benefits, and still use the Equity to purchase more properties! 

@Bill Brandt :  
thank you.  i am originally from Utah,  and Utah was always on my mind in terms of living at long term.  I have a friend who is a realtor in utah who has been helping out, as well as a lender (utah)that i have been per-qualified for.  but did not mention anything about borrowing against my house.  i wanted to really go aggressive and have a unit (duplex ) i can just pay for in cash (from the sale of my primary).  and finance another unit (duplex or condo)  the same year hopfully.  and just rent here in vegas.


Originally posted by @Stephan Kraus :

Hey Jeffrey, welcome from a fellow Vegas Investor - great job on paying the house off! i agree with option three, keep your primary residence but look into a Heloc or Cash out ReFi, i just received a offer from a lender to do a 3.25% 30yr refi, you wont find any cheaper money, that way you can keep paying down the loan and reap benefits, and still use the Equity to purchase more properties! 

 could you tell me who that lender was?  thank you again.

One questions with heloc the rate is variable?  And i still have to get another mortgage for the rental property (duplex)  so i will be looking at 2 morgage payments basically for the rental property?  

If thats the case how is this a good thing?  

so no one can answer me back?

And for the ones that borrow against there primary residence and still owe money on that and get a heloc and get anothet loan..... OMG that seems like a crappy situation with risk knowing you have 3 loans not including if that individual has car and credit cards.....  


Congratulations paying off your mortgage! It sounds like you have a lot of options. What is your motivation for looking at Salt Lake City?

As a Realtor in SLC, I've not found many duplexes/ multis that cash flow in the "good" parts of town. If you want to own on the East side of town, you're looking for creative ways to make the deal work, or accept it will be an investment for appreciation. A duplex here is still a great investment as a house hack.

Please PM me if you want any more specific info.

Thanks, Andy

@Jeffrey Kim Thanks for your post as I'm sure many people are in a similar situation that would like to avoid debt. 
Based on what you've said above, you might consider staying in your current home and saving up for a down payment on that future duplex. I personally dont see a lot of gain through selling your home and then renting. Your aversion to increased costs over time make nervous that your rent will go up Up UP much faster than the property taxes and insurance from your current home. 
If you wanted to be more aggressive I would consider getting a fixed rate loan against your current home and using those funds to purchase a new rental property. (owner occupied rates are more favorable than investor financing)  Your ability to pay the home off the first time should give you confidence to take on the challenge again. While you're working on that your tenants will also be helping to pay off your mortgage. 
Part of why I'd recommend this more aggressive approach is so that you can get exposure to having a rental property. Rentals aren't for everyone and better to dip your toe before jumping in. Best of luck  

Have you considered the tax implications?  If you sell a primary residence, typically you save on capital gains if you meet the criteria.  Then roll your proceeds into that duplex in SLC.  Also, you may be able to get a decent rate if you buy a duplex as your primary residence.  Live in one half and rent out the other.  Then in a couple years buy a new primary or a new investment.  With this strategy, you potentially save on the property management fees from having the out-of-state rental back here in Vegas.  

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