Thank you all. Great input all around!
I should clarify:
Current home in state A, new home in state B. We are torn on buying new home but retain current home for either permanent rental (which most of you recommend against) or retaining current home as primary residence, and then utilize mountain home as secondary, but rent out via short term rentals (Airbnb style etc). Or simply buy new home, and sell current home (simplicity at its finest!)
First next step for me is to get a hold of a mortgage broker and see what we even qualify for. Then re-asses
DesertDiva wrote: ↑Thu Oct 08, 2020 1:07 pm
Another consideration: altitude sickness is a big problem for some people. Have you spent much time in the mountains? Like more than a weekend? If not, you might try to visit for a period of time before committing to a real estate transaction.
Something to think about
Yes, very good point. We are covered. We both do extensive hiking (Everest base camp, Kilimanjaro, Andes mountains, etc)
tibbitts wrote: ↑Thu Oct 08, 2020 11:44 am
So you can work at your job in either property, but your spouse will lose her job if you move, correct? But your spouse is okay with that.
Having had experience with the two-property situation, I would sell your current house and move to where you want to live.
Thank you. Spouse would have to get new job in same field, which is totally manageable in that area. Long term she does want to shift to another field, but not yet.
And good point about personal feedback on owning two properties. This seems to be a trend people say to avoid.
geerhardusvos wrote: ↑Thu Oct 08, 2020 8:57 am
My recommendation would be to sell the house in order to buy the next one. You won’t regret it. You might regret being a landlord though...
Thank you, and noted! I like the easy button option of not dealing with a broken water heater in another state, at 9pm on a Saturday...
DesertDiva wrote: ↑Thu Oct 08, 2020 8:32 am
1. Pay off the first mortgage
2. Buy second property with 20% down
Time for me to get cranking!
onourway wrote: ↑Wed Oct 07, 2020 9:37 pm
The calculation isn't simply your mortgage payment vs. what you could rent it for. You need to look at the big picture, and you have at least $320k in equity tied up in that home. $1700 in rent on $320k in equity is only a 5% return before you account for a single expense. By the time you factor in taxes and insurance and maintenance and vacancies and whatnot, you could get a better return from a CD, even with today's rates, without the hassle of owning a rental property.
Thank you for pointing out the basics. This is so true, and something we need to be aware of. It is often easy to miss the obvious.
tomtoms wrote: ↑Wed Oct 07, 2020 7:57 pm
You should check with a lender and see if you would qualify for two mortgages. Lenders typically count "rent" as income only after 1 year of renting it out.
Thank you. Top of my list today/tomorrow. I "think" we are in good financial health, but never know. And we certainty do NOT want to sit too tight.
JBTX wrote: ↑Wed Oct 07, 2020 9:31 pm
Keeping and renting current house would be something like $15000 income on $500k of equity if mortgage were paid off. That's a pretty poor return on investment. About 3.0%.
What is the motivation to keep 2 properties?
"Safety" if we do not end up liking the mountain style living after 12+ months, we could always move back. Current home is in a highly desirable area that will only continue to increase in value/popularity. But to your indirect point, we could always just buy in other area.
Other idea was to be able to rent out mountain cabin 6 months a year via short term rentals. But maintain current home as primary residence.