Should I build on lot or sell lot to pay off my house

[Joshua Nunnally]

Good Morning,

I am new to this site but have a question that I have had a hard time figuring out. I own a house in a fast growing neighborhood in Nashville, TN. I also own the lot next to me. I owe about $160,000 on my house and if I sell the lot could pay off my house. After paying off my house I would have enough in savings to buy a $200,000 rental property in Nashville. The other option would be to build on my lot and rent out the current house I live in. To build I would be looking at $250,000. I'm leaning more towards paying off my current house and then starting to invest in rental properties. Has anyone done this or can anyone give me any advice.

[Brad Taylor]

Are you saying that you can sell the lot for $360K or would the new investment be leveraged? I think it really depends on what your goals are. I am guessing that you are not in love with your current house, but how bad are you wanting the new house? Enough to possibly delay REI? Personally, I would rather be sitting in a paid for primary with a paid for (or even leveraged) rental rather than having a mortgaged new house with a mortgaged rental.