Refinance current house or move to new residence
Member since 2021 · 28 posts · 5 votes
Refinance current house or move to new residence
Most Popular Reply
Real Estate Agent · Kansas City · Member since 2018 · 4k+ posts · 3k+ votes
11moQuote from @Jean Pierre Jabo:
Quote from @Caleb Brown:
What is the reason for moving? Holding the place doesn't make a ton of sense short term, you'll be losing money monthly after accounting for costs. If you want to move sell the house and move. You could explore refinancing but that would be a conversation with a lender. With you buying in 2024 I am not sure you can refinance yet, keep in mind there is closing costs with refinancing
I can it’s been over a year so I can refinance. Why sell. lol i would lose money since I haven’t hold on to the property for so long. I want to benefit from appreciation and acquiring more units. Also I should add I want to move and stay in the same city.
I don't think keeping this and moving out will help you acquire more units unless you are banking on appreciation (which is guessing and not a quick perk). I would just hang tight in that home. Still explore refinancing but actually find a deal that works instead of being way in the red with trying to rent out this home.
12 Replies
- Real Estate Agent · Kansas City · Member since 2018 · 4k+ posts · 3k+ votes11mo
What is the reason for moving? Holding the place doesn't make a ton of sense short term, you'll be losing money monthly after accounting for costs. If you want to move sell the house and move. You could explore refinancing but that would be a conversation with a lender. With you buying in 2024 I am not sure you can refinance yet, keep in mind there is closing costs with refinancing
- Member since 2021 · 28 posts · 5 votes11mo
Quote from @Caleb Brown:
What is the reason for moving? Holding the place doesn't make a ton of sense short term, you'll be losing money monthly after accounting for costs. If you want to move sell the house and move. You could explore refinancing but that would be a conversation with a lender. With you buying in 2024 I am not sure you can refinance yet, keep in mind there is closing costs with refinancing
I can it’s been over a year so I can refinance. Why sell. lol i would lose money since I haven’t hold on to the property for so long. I want to benefit from appreciation and acquiring more units. Also I should add I want to move and stay in the same city.
- Real Estate Agent · Kansas City · Member since 2018 · 4k+ posts · 3k+ votes11mo
Quote from @Jean Pierre Jabo:
Quote from @Caleb Brown:
What is the reason for moving? Holding the place doesn't make a ton of sense short term, you'll be losing money monthly after accounting for costs. If you want to move sell the house and move. You could explore refinancing but that would be a conversation with a lender. With you buying in 2024 I am not sure you can refinance yet, keep in mind there is closing costs with refinancing
I can it’s been over a year so I can refinance. Why sell. lol i would lose money since I haven’t hold on to the property for so long. I want to benefit from appreciation and acquiring more units. Also I should add I want to move and stay in the same city.
I don't think keeping this and moving out will help you acquire more units unless you are banking on appreciation (which is guessing and not a quick perk). I would just hang tight in that home. Still explore refinancing but actually find a deal that works instead of being way in the red with trying to rent out this home.
- Member since 2021 · 28 posts · 5 votes11mo
Quote from @Caleb Brown:
Quote from @Jean Pierre Jabo:
Quote from @Caleb Brown:
What is the reason for moving? Holding the place doesn't make a ton of sense short term, you'll be losing money monthly after accounting for costs. If you want to move sell the house and move. You could explore refinancing but that would be a conversation with a lender. With you buying in 2024 I am not sure you can refinance yet, keep in mind there is closing costs with refinancing
I can it’s been over a year so I can refinance. Why sell. lol i would lose money since I haven’t hold on to the property for so long. I want to benefit from appreciation and acquiring more units. Also I should add I want to move and stay in the same city.
I don't think keeping this and moving out will help you acquire more units unless you are banking on appreciation (which is guessing and not a quick perk). I would just hang tight in that home. Still explore refinancing but actually find a deal that works instead of being way in the red with trying to rent out this home.
thanks for your reply. So how would you go about scaling or building your portfolio if you were in my shoes?
- 11moDan H.Pro MemberInvestor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
Quote from @Jean Pierre Jabo:
my wife and i bought a unit last year in 2024. home is a 4 bd 2 bth, comes with a detached ADU unit thats 1 bed one bath with separate backyard that we currently rent for $1545 longterm. our interest rate is high, 7.1%. our mortage is about 3600 but adding PMI and other costs its total of $4k/month. we both make a combined income of $220k.
should we try to move to another primary residence home about $480k and rent out our current main home for about 2300-2400 (fair market pricing for the area). or should we stay in our home and refinance and live there for a year and then move later?
Total rent $3845
50% rule
$3845 * 0.5 - $3600 = $-1,677/month
That is a lot of negative cash flow. Are you prepared to supplement the property over $1500/month. I will say it will get old fast. The first time something goes wrong (and something will eventually go wrong) this negative cash flow will have you question the why.
I have a fair amount of units. Our worst performing for its equity position is our ex-home. This is because it was purchased to be a good home for me and my family and not the best investment.
It appears that the property was $540k. not sure what you market has done since purchase. At 6% discount from $540k is $496.8k. The monthly rent ratio is a 0.77% monthly rent ratio. With today’s rates, most properties are cash flow negative even with a 1% rent ratio.
The question you need to ask yourself is if you would purchase this property today at 6% to 10% less than market value (to reflect selling costs) as an investment property. I know I would not give it a second look. Cash flow negative and no significant value add. Relies on appreciation for primary source of return without any means for sweat equity, just market appreciation.
Good luck
- Member since 2021 · 28 posts · 5 votes11mothanks for your reply. So how would you go about scaling or building your portfolio if you were in my shoes?
Quote from @Dan H.:
Quote from @Jean Pierre Jabo:
my wife and i bought a unit last year in 2024. home is a 4 bd 2 bth, comes with a detached ADU unit thats 1 bed one bath with separate backyard that we currently rent for $1545 longterm. our interest rate is high, 7.1%. our mortage is about 3600 but adding PMI and other costs its total of $4k/month. we both make a combined income of $220k.
should we try to move to another primary residence home about $480k and rent out our current main home for about 2300-2400 (fair market pricing for the area). or should we stay in our home and refinance and live there for a year and then move later?
Total rent $3845
50% rule
$3845 * 0.5 - $3600 = $-1,677/month
That is a lot of negative cash flow. Are you prepared to supplement the property over $1500/month. I will say it will get old fast. The first time something goes wrong (and something will eventually go wrong) this negative cash flow will have you question the why.
I have a fair amount of units. Our worst performing for its equity position is our ex-home. This is because it was purchased to be a good home for me and my family and not the best investment.
It appears that the property was $540k. not sure what you market has done since purchase. At 6% discount from $540k is $496.8k. The monthly rent ratio is a 0.77% monthly rent ratio. With today’s rates, most properties are cash flow negative even with a 1% rent ratio.
The question you need to ask yourself is if you would purchase this property today at 6% to 10% less than market value (to reflect selling costs) as an investment property. I know I would not give it a second look. Cash flow negative and no significant value add. Relies on appreciation for primary source of return without any means for sweat equity, just market appreciation.
Good luck
- Member since 2021 · 28 posts · 5 votes11mo
- 11moDan H.Pro MemberInvestor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
Quote from @Jean Pierre Jabo:
thanks for your reply. So how would you go about scaling or building your portfolio if you were in my shoes?
It is a tough RE market. Interest rates are near the highest for this century. Property prices per 2 recent studies are at an all time high versus rent (the studies were comparing the cost of home ownership to renting and both studies concluded that in virtually every large US city it is on average cheaper to rent than to own).
In virtually all markets the days of purchasing a rent ready property at retail off the MLS is not going to permit a quick scaling. It likely is not going to beat other investment options available.
It is my view there are only a few paths in RE in my primary market (and most other RE markets) at this moment 1) patience. I am thinking years of patience. My market has historically out performed virtually all other markets. Over the long term I believe this will continue. However, other markets have the same challenges contrary to the posts from OOS agents. I am not that patient. 2) value adds. For the most part these require work and have risk but there are few markets that do better than my market via value adds. My last purchase is up over $1m above my costs in 3.5 years. 3) alternate rent models (rent by room, STR, MTR). These require work. Pay a pm and the profit is significantly reduced 4) alternative below market financing such as assumable, owner finance, wraps, sub to, etc 5) path of progress. Buy in areas that appreciation will far exceed the general market. It there a large major infrastructure development somewhere? In my market they recently completed a multi billion dollar Chula Vista bay front redevelopment. Already approved but early in the process are a large enhancement of a secondary airport (brown field) and the midway rising development which includes a new arena, retail, and residential development. With such large and costly development, these areas seem likely to out appreciate the general local RE market.
Good luck
- Specialist · Member since 2025 · 483 posts · 270 votes11mo
Stay put for now and run the numbers, not the itch. With a 7.1% rate and a solid ADU rent, first see if a no‑cash or low‑cost refi or streamlined option meaningfully drops your total payment after fees; if it does, refinance, stabilize for 12 months, and bank reserves. Only move if the new primary's all‑in payment, after realistic rent on your current main plus the ADU, leaves you with positive monthly spread and enough cash cushion. If you need liquidity, consider a small HELOC instead of a full cash‑out so you don't restart the clock. Next step: price three quotes side by side (refi vs HELOC vs move), include closing costs and PMI, and choose the path with the best monthly cash flow and safety buffer.
- Real Estate Broker · Antioch, Ca. 94509 · Member since 2025 · 149 posts · 21 votes11mo
You’re in a solid position with strong income and a property that already produces rent, so you have options. Before moving, I’d run the numbers both ways. If you refinance now and rates drop even a little, your monthly payment could go down enough to make staying another year worthwhile. That would also give you time to build more equity and let the market settle.
If you move and rent out the main house, make sure the total rent from both units covers your full mortgage, taxes, insurance, and maintenance with some cushion left. What’s in it for you if you wait and refinance is better cash flow, less stress with moving costs, and stronger leverage for your next purchase. On the other hand, if you can carry both properties comfortably and want to scale faster, moving now could position you for long-term wealth growth. It really depends on whether your short-term goal is stability or expansion.
- Member since 2024 · 158 posts · 88 votes11mo
Can you put down more equity to remove the PMI? Maybe that could get you to break even in the meantime. Then you could do a house hack to scale.
- 11moHersh ShahBusiness MemberRealtor · Atlanta, GA · Member since 2016 · 121 posts · 80 votes
Quote from @Jean Pierre Jabo:
my wife and i bought a unit last year in 2024. home is a 4 bd 2 bth, comes with a detached ADU unit thats 1 bed one bath with separate backyard that we currently rent for $1545 longterm. our interest rate is high, 7.1%. our mortage is about 3600 but adding PMI and other costs its total of $4k/month. we both make a combined income of $220k.
should we try to move to another primary residence home about $480k and rent out our current main home for about 2300-2400 (fair market pricing for the area). or should we stay in our home and refinance and live there for a year and then move later?
If its been long enough since you purchased, I'd consider doing a rate/term refinance to drop you into a low 6% interest rate. Since its a refinance, you can shop around with the best local credit union and even get in the high 5% range! That should save you several hundred dollars per month which you can put toward the down payment of another property in due time. Leaving this residence prior to doing that in my opinion will not serve you because you won't be able to capture the lowest interest rate available as an occupant.
The goals isn't always to acquire as many units, its to make and keep the most money possible.
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