Author Topic: Sell current house and buy a new one?  (Read 716 times)

jamesbond007

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Sell current house and buy a new one?
« on: April 12, 2018, 12:07:37 PM »
I have been a homeowner for a little over 2 yrs no. I bought my house for $440K + 5K closing costs. A house with the exact floorplan in our community was sold for $545K 2 months ago. Mine is a town home style condo so I pay $300 HOA each month. I just saw a single family home just couple of miles north of where I live with slightly better schools. The lot size if 4000sft and living area is 1060 sft. My current living area is 945 sft and I have a 400 sft front patio. This single family home asking price is about $700K. My guess is that it will probably go for about $750K. It has slightly better schools. I save $5K a month after all expenses including mortgage. My current APR is 3.625% for 30 years and I am already 2 years in. I plan to pay off my house in another 13 years.


I am tempted to bid on this other house and rent my current one out. I could easily pull in a rent of about $2700 a month (My monthly PITI+HOA is $2400) or even sell this and pay no tax on the profit. @4.5% my monthly PITI would be at least $4000. It will be about $1600 more per month on average. That would be I will be saving $1600 less per month for the foreseeable future but I will be getting slightly better schools (highly subjective, I know) and a single family home without sacrificing my commute and no HOA.


Is it worth pursuing? Am I making a mistake? Anything I am missing? Good idea/bad idea? Any thoughts? Feel free to face punch if this is a stupid decision.

AMandM

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Re: Sell current house and buy a new one?
« Reply #1 on: April 12, 2018, 12:30:55 PM »
$2700 rent on $2400 obligations only leaves you $300/month to cover vacancy, repairs, administrative expenses, etc. One month vacancy and you're in the red for nine months. Does not sound like a good plan to me.

You are looking at decreasing your savings by at least a third for the next 13 years (while you would be paying off the current mortgage) and even more for the 17 years after that (assuming you are looking at a 30 year mortgage for the new house).  Is the new house really worth that?

How old are your kids? How much of a difference will it make to them to change schools?  Do you really need more square footage? If so, are there any cheaper SF houses in the better school district or is this house for some reason a special bargain?

If this house you're thinking of bidding on were not on the market, would you be thinking about selling and moving? If not, I'd definitely stay put.

« Last Edit: April 12, 2018, 12:33:57 PM by AMandM »

nurseart

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Re: Sell current house and buy a new one?
« Reply #2 on: April 12, 2018, 12:37:34 PM »
Personally, I would stay put. You've only been in that house for two years and paid all those closing fees.

Sounds like the new house isn't wildly better and I don't hear you saying any reasons why you NEED it.

The idea of moving for 50 square feet hurts my brain. And the cost of housing where you live hurts my soul.

jamesbond007

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Re: Sell current house and buy a new one?
« Reply #3 on: April 12, 2018, 02:49:41 PM »
Good points. I did not think it that way. If this house was not on the market, then I'd be staying put. I guess I will keep what I have.