Author Topic: Buy a condo biking distance from work and rent out house?  (Read 1777 times)

Dwreck

  • 5 O'Clock Shadow
  • *
  • Posts: 3
Buy a condo biking distance from work and rent out house?
« on: December 09, 2013, 03:19:11 PM »
Hello all of my Mustachian friends,

I have been pondering if I should buy and a condo closer to work and rent out my house. Right now my house is 17 miles from work and the average commute is 40 minutes. The house is worth 300k or so. I should be able to rent it out and pocket $100-150 each month after considering 10% of rent would go to vacancy and another 10% to repairs. I should be able to pick up a condo close to work for about 180k-200k. This would allow my wife and I to have just one car and lower our house payment on top of fuel and time savings ect. I will need to save for about a year or two to make the 20% down payment.

In the next couple months we will be debt free. Does this sound as a good idea? I have over 100k in equity from the house. Should just sell and buy closer to work now and use the equity? I don't feel I should sell my house because I bought it for such a great price.

Let me know what you guys and gals think. Thanks for all the help!

chasesfish

  • Magnum Stache
  • ******
  • Posts: 2768
  • Age: 36
  • Location: Texas
    • Years in the making, I created a journal!
Re: Buy a condo biking distance from work and rent out house?
« Reply #1 on: December 09, 2013, 04:32:08 PM »
Your house is worth $300,000?  Can you rent it for at least $2250/mo .  If not, sell. 

Cooperd0g

  • 5 O'Clock Shadow
  • *
  • Posts: 67
Re: Buy a condo biking distance from work and rent out house?
« Reply #2 on: December 09, 2013, 06:06:17 PM »
A big part of this decision is how you would feel about being a landlord. If you are cool with that then what you propose make sense. If not then sell and move.

_JT

  • Stubble
  • **
  • Posts: 229
Re: Buy a condo biking distance from work and rent out house?
« Reply #3 on: December 09, 2013, 08:31:52 PM »
The key question is do you ever plan to reoccupy the house. If yes, then how soon? If no, then definitely sell. The moment you buy a new place and rent your current place, your rental property becomes an investment. If you bought it as a residence, 9/10 that makes it a crappy investment, numbers-wise.

Dwreck

  • 5 O'Clock Shadow
  • *
  • Posts: 3
Re: Buy a condo biking distance from work and rent out house?
« Reply #4 on: December 10, 2013, 10:07:57 AM »
Do you think it it would be better to sell and use the proceeds to buy the condo close to work and buy an out of state rental? Possibly a duplex or a fourplex? I live in San Diego so there is no way to buy a rental anywhere around here at a price that makes sense.

Buying at least one rental property is in our plan for early retirement.

_JT

  • Stubble
  • **
  • Posts: 229
Re: Buy a condo biking distance from work and rent out house?
« Reply #5 on: December 10, 2013, 10:26:38 AM »
I think if you look into it you'll be surprised. Even in San Diego, there are affordable rental properties if you're willing to look 20-30 miles outside of town. That said, you'll probably get better returns on an out of state property, especially multifamily. But it's all about your comfort level owning a property you never set foot in, and finding a kick ass property manager to do all the dirty work for you.