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Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: Landlady on August 05, 2016, 04:19:22 PM

Title: Help calculating my pathway to FI please - RENT V SELL
Post by: Landlady on August 05, 2016, 04:19:22 PM
Hi folks, I've strived to be as Mustachian as I can over the years, but I'm really buckling down now and I could use some help figuring out my sell vs rent tactic to get FI faster. I think the numbers look like I should sell one or more of my rental properties soon, but I'll admit I'm letting emotions get in the way because I always envisioned myself having this passive income into old age. Help me see this as just numbers please!

I have two rental homes and a home I live in. I'm trying to figure out if I should sell one, or both rentals in order to retire sooner than later.

Here's my annual financial picture:

Duplex value: ~$750,000
Mortgage remaining: $315,000 @ 3.25% with 27 yrs remaining on loan
Net rental income: $16,200
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If I sold the duplex I would stand to get ~$435,000 to invest, but miss out on $16,200 in rental income which would increase over time because I'm in a hot market.


Triplex sold value: ~$1,100,000
Mortgage remaining: $570,000 @ 4.25% with 29 yrs remaining on loan
Net rental income: $28,824
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If I sold the triplex I would stand to get ~$530,000, but miss out on $28,824 in rental income which would increase over time because I'm in a hot market.

Non-rent family income: $155,000

Annual family expenses: $90,000 (this includes another mortgage amount for the home I live in which I will not sell)

Current savings: $317,000

Thank you in advance wonderful, Mustachians!
Title: Re: Help calculating my pathway to FI please - RENT V SELL
Post by: honeybbq on August 05, 2016, 04:23:45 PM
You didn't post your monthly mortgage/insurance/upkeep/expenses for your rentals, but my question is  -  why? Why would you sell now? Are your properties turning a profit?
Title: Re: Help calculating my pathway to FI please - RENT V SELL
Post by: Landlady on August 05, 2016, 04:39:45 PM
My properties are turning a profit, but I think the rate at which they are turning a profit may take longer for me to become FI than if I were to sell one or both. It's a hunch.
I didn't post the monthly expenses of the rentals because I calculated that in the background in my spread sheet. Apologies:
Net rental income = Gross rents - loan - upkeep and expenses