Author Topic: How to calculate RE investments into FIRE date  (Read 1085 times)

valuenation

  • 5 O'Clock Shadow
  • *
  • Posts: 9
How to calculate RE investments into FIRE date
« on: February 27, 2017, 05:38:44 PM »
Hola.  Super Newb here. My question is based around FI calculators.  They tend to require investments that are only in funds/stocks and not residential properties.  We have two rental properties that are currently around 800K total with 400K in mortgage.  In 8-10 years they will both be paid off.  That is about in line with my FIRE date.  But I'm not sure how to put that in a calculator?  Do I add that in the fund portion or just use the real number currently in my Vanguard and then add what I hope to sell the properties for?  Thanks for your help.

BTDretire

  • Magnum Stache
  • ******
  • Posts: 2956
Re: How to calculate RE investments into FIRE date
« Reply #1 on: February 28, 2017, 08:36:55 AM »
The best you can do is make best and worst case scenarios.
You can't predict the growth rate of the two houses, but you can
guestimate. At 3% growth rate they will be worth $1.1M, at 8%
grow rate the will be worth $1.7M.
The big question, will you want to sell them and pay the taxes which
could be substantial. It might be better to live of the rental income,
even if you want to hire a management company.
 Another scenario, in 10 years you might refinance them,
and put that money into the stock market, bonds, whatever
will generate income at that time. Just make sure you still have rental
income to cover all your expenses and mortgage payments.

valuenation

  • 5 O'Clock Shadow
  • *
  • Posts: 9
Re: How to calculate RE investments into FIRE date
« Reply #2 on: February 28, 2017, 04:08:07 PM »
Thank you BTDretire.  Good info all around.  Appreciate your help.