Hi there, thought I might look here for some help.
My wife and I recently moved into a house we re-built. After 3 years of sweat equity, all we owe on the place is a $70k HELOC which we pay off as much as possible every month.
We also own the house next door which we owe about $250k of principal. The house is worth about $350K and there's 29 years left on the mortgage as we refinanced last year. We rent it out for $1700 per month which covers the cost of mortgage payments, insurance and property taxes.
I'm a general contractor and would like to build a shop (garage) with a one bedroom apartment above it which we could rent out long term for about $1000 per month. Unfortunately, we don't have the money to do this at present.
Our renter recently inquired if we were willing to sell the house he rents from us as he loves the location and the house. He is a good guy and a perfect neighbor. (He's been renting for a year).
If we sold, we would wipe out all of our debt and then be able to build the shop which would immediately start generating income as we live in a very desirable neighborhood (since Trader Joe's and Wholefoods moved in down the street).
Seems like an easy decision but we are nervous about selling the other house as prices just keep climbing as more wealthy people move in. Is there something we are not thinking of? This present government makes me nervous and we're long overdue at least a hiccup in the market.