Buying & Selling Real Estate
Market News & Data
General Info
Real Estate Strategies

Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal



Real Estate Classifieds
Reviews & Feedback
Updated almost 7 years ago on . Most recent reply

New Investor Seeking Advice
I purchased my condo 7 years ago and it has nearly tripled in value. While I'm excited about this, I really like the location and layout of my place - it's in a nice, quiet neighborhood close enough to the city but far enough so families are comfortable (Oak Park, IL) I'm right by the metra and 'L' (subway) which is fantastic for my commute to work.
I'm graduating from my masters program without any student loans and I don't have any debt aside from my current mortgage, which I owe about $25k on.
Should I sell and use the profits to invest in a new place? My concern is the market seems to be a sellers market now, and I'd hate to invest and end up underwater. I was thinking of buying a 1-2 bdrm in Wrigleyville and renting it out with AirBnB. With 81 Cubs games/year, I could bring in at least $225 a night. It's a pretty big tourist location. I'm concerned about regulations though, and wouldn't want to be stuck with a high mortgage and no ability to rent or airbnb my unit.
I could also invest my profits and rent until I find a great real estate deal - but that means spending $600 more a month on rent (My mortgage is crazy low).
Here's the breakdown:
Home sold for $50k, worth $130k
Rent nearby is around $1300/Month (The HOA Prevents me from renting my unit out unfortunately)
Options:
1-Stay, save up and continue to have a low mortgage
2-Sell, buy a new place and invest my earnings in non-real estate investments
3-Sell, buy a place in Wrigleyville and airbnb it out while renting elsewhere
4-Stay, get a home equity loan and do #3 (minus the sell part)
What do you think? Am I missing any options, and what's the best option?
Most Popular Reply
5. Stay and refinance your mortgage and pull cash out to use as a down payment(s) to buy rental properties.
As an investor, ideally you want your primary housing to be inexpensive. Sounds like you hit a home run on your condo, great job on that.
The home equity loan would be at either a much higher rate and/or adjustable, versus a low fixed rate on doing a refi to your mortgage. You could refi with a loan up to 80% of the appraisal and get locked into a low fixed rate, which IMO is the smart move in a rising rate environment.
Now you have 50K or so to play with, and still a manageable mortgage payment. Lots of options from there.
Best of luck!