All Forum Posts by: Cooper Meurer

Jessica, 

I believe you’re right, it would be something that weighs on me, giving up this interest rate and equity position. This is the reason for the post, we are a big budget couple and love to save money, so we could put down 5% on a primary residence in the next 6 months very easily if needed. We actually just reached a point that we have 6 months of mortgage payments set to the side and generating a little bit of interest in case of vacancy when we first move. We’re excited!

Appreciate that, Gino! I have lived in Midland my entire life and feel like I have a good understanding of the bubble this area is in with oil and gas and how it affects home prices. My experience is that it might be wise to hold. I’m definitely leaning towards holding and starting my portfolio up!

Quote from @Theresa Harris:

Does your mortgage payments include property taxes?  You also have insurance.  Run the numbers, but  you also have to think about capital gains when you do sell (now vs 5 years from now).  That can cut into your net gain quite a bit.  If you have no plans to move back, I'd sell and then decide what to do with the money.  Buying or buying a rental in the new city may not make sense if you are only there for a few years.

 Theresa, 

My monthly mortgage shown above is including property taxes and insurance! I failed to mention that I will be frequently coming back to Midland for work as well as to visit family, so the distance doesn’t really bother me. If I do decide to sell the property after it becomes a rental, I believe it will happen within 24-36 months. 

Quote from @Andrew Kiel:

Here's a few things to think about to help your decision.

1.  As an owner occupied home, you can sell and take the profit tax free.  This applies only if you live in the home 2 out of the last 5 years.  If you rent for 3+ years you start to phase out your tax advantage to taking the equity tax free.

2.  You're moving 5+ hours away.  It's not a lot of fun to manage a rental from that distance.

3. What is the best return on equity for your 60-70k net?  Is it buying a new home for you and your fiance?  Can you get a better return on a different investment after you move?

4. Perhaps selling with owner financing is a good way to go, that 4.75% rate is quite nice and you can likely get 7-8% with owner financing (perhaps even more).  This may be the best of both worlds scenario, some income and some recapture of equity.

Thanks for the reply! 

luckily, we have plenty saved for a 3.5-5% DP on our primary residence. We plan on renting a home in the Austin area for 9-12 months to feel out where we would like to live and not jump into a new buy in an area we don’t know well. 

Quote from @Cooper Meurer:

Quote from @Ryan Kelly:

@Cooper Meurer congrats on your upcoming move to Austin! It’s a great market for long-term appreciation and growth, but it will be harder to achieve cash flow compared with how the Midland home is structured. Can you afford property management to handle the rental details when you move away? If so, I’d consider keeping it.

 Thanks for the reply!

We are in a great position financially with no debt other than our mortgage and this move will be happening at the time of my promotion, so we will be able to afford that rather easily. Another point that I forgot to note, this will be a sales director position covering the midland area and surrounding regions, so I will be frequently traveling to midland for customer meetings and team meetings (2 times per month typically)! 

Quote from @Ryan Kelly:

@Cooper Meurer congrats on your upcoming move to Austin! It’s a great market for long-term appreciation and growth, but it will be harder to achieve cash flow compared with how the Midland home is structured. Can you afford property management to handle the rental details when you move away? If so, I’d consider keeping it.

Hello all! 

I am seeing opinions on my current situation. Hopefully, it doesn’t end up being too terribly confusing. 

I currently live in central Midland, TX in a 3 bed 2 bath single family home (1480 sq ft) with a value of around 305-315k and I owe 221k. I have lived in this home for 4 years now and love my 4.75% rate as well as the equity I’ve seen in those 4 years. My current mortgage payment is $2,000 per month. 

My company is a great paying and flexible company that is allowing my fiance to move to the Austin area when we want to in 2025. I am currently renovating to sell (around 20k in updates). There has been some hesitation for me to sell due to the fact the rental market here is averaging $2,500 in rent for my area and property, I make great money now and have funds to cover vacancy and repairs on the home, but I would like to be able to afford a nice rental for my fiance and I to live in while we save for our primary residence.

Shoild I sell and take my profits (60-70k net) and throw into an investment closer to where I will be living or should I rent, cash flow and build equity in the property. 

Thank you for the advice!