Real Estate Deal Analysis & Advice
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback
Updated over 8 years ago, 09/12/2016
Hello! In search of sound advice...
Hello, my name is Paul. I've been on BP for a couple months, reading, listening to podcasts, and trying to learn as much as possible. I am very impressed with the culture of this community, how much others are willing to share, provide authentic guidance and genuinely want to help people. That is why I want to ask the following question and seek your valued opinions.
I've owned my primary residence in Sacramento, CA since February 2009. I bought the 3BR/2.5 BA 1511 SQFT (built in 2006) for $185,000. Currently, I have 13 years left on a 15 year mortgage (fixed @ 3.0%) which I owe just under $160,000. I've received recent valuations in the $260,000-$270,000 range. Rent for comparable homes range from $1,600-$1,800 per month. Would likely need to refinance to a 30-year mortgage to even consider keeping it as a rental property.
My wife and I had our first child this year and we know we will need a larger home to accommodate a growing family in the future. The question I have is, should we keep our current home as a rental investment property or sell it and use net gain as down payment to secure our long term primary residence?
My wife and I are fairly conservative when it comes to finances and although we both have a serious interest in REI, active investments would only come into play after our primary residence is secured in an advantageous financial position. Our future REI interest is mainly in multifamily units and small apartment complexes.
Below are estimates which do not include a vacancy or capital expense rate, yet.
| Current 15 Year Fixed Mortgage @ 3.0% | |
| Expense | Monthly Amount |
| Mortgage P&I | $1,246.00 |
| Property Tax | $266.00 |
| Home Owner's Insurance | $63.00 |
| Flood Insurance | $44.00 |
| HOA | $90.00 |
| City Utilities (Water/Garbage) | $70.00 |
| County Utilities (Sewer) | $55.00 |
| TOTAL Monthly Owner Expenses | $1,834.00 |
| 30 Year Refinance Fixed Mortgage @ 6.325% | |
| Expense | Monthly Amount |
| Mortgage P&I | $995.00 |
| Property Tax | $266.00 |
| Home Owner's Insurance | $63.00 |
| Flood Insurance | $44.00 |
| HOA | $90.00 |
| City Utilities (Water/Garbage) | $70.00 |
| County Utilities (Sewer) | $55.00 |
| TOTAL Monthly Owner Expenses | $1,583.00 |
Your candid thoughts and opinions are much appreciated. Apologies for the lengthiness. Thank you!