Rental Property Investor · Key Largo, FL · Member since 2020 · 9 posts · 1 vote
I recently purchased a new home that I need to do major work on (new plumbing, electric, HVAC, etc). My old house would sell for 250-300k and I have a 50k mortgage. I need money for the remodel, and construction these days is insanely high. I estimate needing at least 200k for the remodel.
The old house would rent for 2.4k/mo, with mortgage payment of $600/mo (6 years left) and HOA of $200/mo. Add to that management fees, repair costs, etc.
It looks like it would be very easy to sell and use the proceeds for the remodel (this is what my non-RE investors and parents tell me).
I see renting my old house as a means to pay for my new house's mortgage, while also having equity to borrow for the remodel and future investments. However, some days I wake up wanting to rent and others I want to sell and just move on. My 5-year plan is to buy a multifamily.
Real Estate Agent · Ventura, CA (Ventura) · Member since 2021 · 46 posts · 17 votes
4y
@Ana Rodriguez This is a really hard question. In my opinion I would keep the old house and rent it out while living in the new one. The old one according to my conservative calculation would provide you $14,000 of income.
$2400 income a month
$600 mortgage payment a month (including taxes and insurance in escrow account)
$240 (10% of income) for management fees
$200 HOA
$100 Repairs
$100 CAPX
Total 1160 a month = roughly 14k a year.
With All this money why don't you use this and your W-2 to repair and live in the newly bought house and update it along the way. Ya, it might not be glamourous... but who cares. You have a 5 year plan and adding to your portfolio isn't too shabby. Goodluck and keep me posted on what you do.