I’m 33 years old. I bought my first home back in 2012 for $120,000 with a 3.5% interest rate in downtown Orlando. It’s a 3/1, with a huge yard in a great area, near the airport, and good schools. I owe about $80,000 on it.
Since that time, I’ve rented it for the past 4 years as I’ve been working abroad on boats. I’ve upgraded the windows, the bathroom, replaced the roof, put in new flooring, updated the electricity, a new tankless hot water heater.
From market reports it’s now worth $215,000-230,000. It’s also being rented for double my mortgage. My mortgage is $687 and the tenant pays $1500. Is now the time to sell, take my equity out and buy a triplex or larger property, or should I hold and just take a few years more of saving to get a bigger property in addition to my Orlando home? The market seems to be a sellers market in Florida at the moment so I’m not sure how far I’d get. Any advice would be greatly appreciated!
Real Estate Agent · Orlando, FL · Member since 2018 · 31 posts · 6 votes
7y
I'm by no means an expert, but it looks like pulling the equity out of the home is a great idea with a decent return. Also many anticipate a "market correction" in the future so possibly using that return to invest seems like a great opportunity instead of waiting for a potential drop in value?
Real Estate Agent · Orlando, FL · Member since 2018 · 31 posts · 6 votes
7y
I'm by no means an expert, but it looks like pulling the equity out of the home is a great idea with a decent return. Also many anticipate a "market correction" in the future so possibly using that return to invest seems like a great opportunity instead of waiting for a potential drop in value?
Rental Property Investor · Orlando, FL · Member since 2018 · 545 posts · 386 votes
7y
Cari, if I were you I would look into a HELCO or refi to tap into the equity and use it to buy that Triplex or larger. Keeping one performing asset and looking add more cash flow and passive income by acquiring another. Also with the location, the market there may continue to appreciate, especially over time as well as rents and you could end up making more, both cash flow and eventually on the sale. You may even be able to bump up the rents as is if it is that close to downtown as a 3/1.
Lender · Orlando, FL · Member since 2018 · 173 posts · 66 votes
7y
I agree with everyone above. It seems like the best option would be to take a HELOC and use it to invest in another performing asset so you would have two instead of one. It sounds like your rental property now is doing very well, hopefully you will find a great MFR to add to your portfolio!