All Forum Posts by: Connor See

Joshua,

Theres a big math question to be answered here. Especially if you do a cash out refi after moving out, you're going to take the primary residence interest rate that you have and force yourself in to a higher investment property rate, so depending on what that rate change ends up being for you, I dare say you are likely better off just paying PMI on the new place you move to. Depending on how much cash you pull on the cash-out, especially. If you take the 40k that you've got and just put a down payment on the new place, say 10 percent, I can't imagine your PMI ends up being more than $60-$80 a month. Also, depending on the type of appreciation you anticipate, you could likely reach the 20% threshold in equity much sooner than you think. A lot of this is going to be dependent on your credit score and a number of other factors, but try to get some of your unknowns figured out on the number side. I have 2 properties I pay PMI on. One I pay $60 a month for and the other $160. PMI is probably cheaper than you're thinking it is. Personally, I'd take what you have and buy a place and just pay the PMI. Its not worth the higher interest rate that lasts you 30 years, especially since cash flow likely wont be as good after the cash-out. If it really is going to be a $200 a month difference in cash flow on the one for you, your PMI just isn't going to cost you that difference.

@Ryan Mertens other than giving tenants their own panel, is there any other benefit to doing that? Also, though it may only result in a small fine if I’m caught, in trying to stay 100% legal so I don’t want to bank on just not getting caught. I’m thinking AirBnB for the basement once I move out, since short term rental seems to not have any regulation as of now.

My wife and I are planning to build a new single family home in Eagle Mountain Utah and are trying to decide what to do about adding an ADU. We currently live in a townhome that's we will keep and rent out once we move, and are just trying to capitalize on appreciation in the area as much as we can with our limited funds. The thought is to add an ADU by putting a basement apartment that would be 2 bed 1 bath, with the main dwelling being 4 bed 2.5 bath. We recently found out about laws behind owner occupancy for having a legal ADU, in that once we move out, we could no longer rent out the basement as a separate unit. Just want to get some ideas as to what the best long term plan for the property would be. Total expense of the propert with the ADU would be about 2200 a month, with the ability to rent out the apartment for something like 1000 to 1100 a month, compared to about 1900 a month without the ADU. Do we plan to just sell the place in the future, is it best to rent out the home as one unit, or what other good viable options do we have/what do people recommend?