I'm new to MMM, recommended by a friend. I saw there's a forum for real-estate, but I figured I'd post for opinions, then read through that forum.
My situation:
Assets: 2 lots in Seattle, one with a tiny house, one empty, side-by-side, worth roughly $1M. I owe $342K on the properties. I can invest $5k in the property and get about $2200 in rent. I have decent amount in 401k, but no other investments.
I am moving to Minnesota. I am buying a house for $193K. I have the cash to put 20% down, and my monthly expenses will be about $1400/m.
I have options...
- Sell lots, buy new house outright, invest the rest
- Sell lots, put 20% down, invest the rest
Keep house, put 20% down, gather rent.
My initial impulse was to keep the lots, as we may move back to Seattle in 3-7 years, and the house value would scale with the seattle market, ensuring that I would be able to afford a house in the new market... but investing could lead to some big gains too. I've never landlorded, and I'll be doing it from out-of-town, which lends some extra stress.
UPDATE: After talking with my accountant, I found out that we'd have to pay capital gains on the increase in value on the land if we sold after 3 years... as well, the house is small, so rent won't cover mortgage + property management + upkeep... so landlording looks like it isn't a good option.