Parents Florida Home

[Justin Melton]

My parents own a home near Sarasota Florida and are thinking of moving back to the Midwest closer to me.  They purchased the home in 2016 for 275k and it’s now worth around 575-600k.  They really don’t want to pay to maintain 2 places year round.  

They are deciding what do to.  They owe about $150k on the property and pay about $1500 for the mortgage.  If they did an annual rental of their Fla property, they could probably get 3-4k per month. If they did it seasonally Jan, Feb, March maybe closer to $6k per month.  

They are considering selling it and using that cash to pay for a place near me and not having a mortgage. I am an only child and will be inheriting whatever they purchase or their existing home if they don't sell it. Side note, their existing home's neighborhood does not have a HOA and the neighborhood is going downhill even though prices have appreciated. Any ideas, thoughts, suggestions would be appreciated.

[Sarah Meres]

So many great insights above. Here's my gut reaction: 

Don't sell, unless they and you think this is a poor long-term investment. Sarasota is still growing. I have a property in an "old Florida" / No HOA area. Homes on my street are slowly being purchased, knocked down, and built back up due to proximity to the beach. At a bare minimum, if they choose to keep the home, get a HELOC while it's still their primary home. This can allow them the cash if needed for the new purchase in the Midwest. I would not refi the FL home if the first mortgage is at a low rate and they don't need the cash out of the property right away.

Owning two homes doesn't always mean having to play landlord. I own several properties in Minnesota that are all professionally managed. There are expenses from time to time, but the day to day is handled and covered by the rent I receive!