Hi, I'm not very deep yet in figuring out the particulars of my financial strategy, but my wife and I have been pretty decent savers. I'm trying to decide whether to keep my current house and buy another (in two years or so, and likely out of state) or sell and have a low mortgage o another. I'm hoping you all can help me gain a little perspective.
Property info:
Market Value: 315k
Original Purchase price: 185k
Original Mortgage Amount: 165k
Interest Rate: 3.875
Mortgage Term: 30 years
Term remaining: 26 years
Amount remaining on mortgage: 115k
Gross Rents: Zillow says 1600/month
Principal and Interest (the P&I of your PITI - should match with the above info): About 700/month, I believe
Taxes and Insurance (the T&I of your PITI): About 200/month
HOA costs: 0
Deferred maintenance notes: Might need a new roof in the next couple years, or at least a new layer of shingles.
In the next 2 years or so, I'm planning to get a better paying job, likely out of state. I see two options for our home:
1) Rent out our current house and buy another in our new area. Estimated realistic equity right now: 200-220k. Current mortgage is 900/mo, but we put in 1100/mo. Zillow says we could get around 1600/mo in rent. If we live out of state, we'd have to hire someone to manage it. Also, my house may not be a great rental property. The furnishings are far from tenant proof- they may beat up the nice kitchen we put in ourselves, and flooring is almost certain to get destroyed (just laminate, carpet, and tile, though). If I were local, I'd manage and maintain it myself, but that likely won't be an option.
We have about 80k saved up for down payment, apart from other savings, budget categories, retirement funds, etc., So we could buy a decent house without selling. We've been saving about 1100/month for that budget cateory, and could continue to do so.
2) Alternately, we could just sell it and have a low mortgage on the new house. If we got 210 k from selling, plus the 80-100 k we've saved by that point, we wouldn't need much more to buy a really nice house in most areas (or a snack with a long commute in SoCal or Seattle, where much of my industry is).
Can you please help me identify some pros and cons of these strategies, and any good alternatives I may have missed?
More info-
37 year old single bread winner with family. We have approximately 310k in our retirement accounts. I make about 105k/year. I expect I could make 15-20k more if I get a great new job. I had great offers elsewhere during my last job search, but stayed here to be closer to family.
I'm maxing out my 401k. My wife and I both have IRAs, but we haven't been contributing since we had a kid. We are also saving for their college funds. We have no other debt besides the house, and I think we are pretty good budgeters and savers, but may not hold a candle to some frugality experts here!
I would really appreciate your feedback! Thank you all!