I live in Southern California (Orange County) and bought a home in February of 2011 for $475K as a slow flip. Since I could not afford a home that I wanted for the long term, I decided to buy an older home that I could spend time fixing up and then hopefully sell for a profit which I could then use to potentially get in to a home that I wanted to commit to for the long term. Property values have gone up roughly 20% or so since I purchased the house and are approaching about 15% of near peak/bubble levels. I have a strong feeling we're approaching another mini bubble here in Southern California as we head in to the summer and so while I'm leaning toward selling, I'm also realizing that every other home has increased by 20% and so I don't know that I'll be getting great value if I sell and buy.
Understanding that I do NOT want this to be my primary residence for the long haul (for a variety of reasons but namely, the neighborhood, the layout of the house is not ideal, etc), I'd like to get your help on what would make the most financial sense for me moving forward. Here are some details on the house and my situation and some options I've considered below. Any and all input is appreciated!
Home DetailsHome Information: SFR, 4 bedroom, 2 bath, 1,500 sq ft (7,500 sq ft lot size), corner lot, 3 car garage
Home Purchase Price: $475K (purchased Feb 2011)
Current Zillow Zestimate: $565K
Assessment Value: $600K (assessed last year for a refinance)
Mortgage: $399K @ 4.125% (30 yr fixed)
Monthly Mortgage Payment: $2,400 ($1,900 mortgage, $440 property taxes, $60 insurance). There is no HOA or Mello Roos tax.
My DetailsAnnual Income: Base Salary of $136K. Additional ~$15K in bonuses and incentives.
Monthly Take Home: $10K gross, $6.7K after taxes/max 401K contribution/etc (this does not include bonuses/incentives as those vary and are one-time distributions that often pay out but don't always do)
Personal: Single, no kids, 35 yrs old
Zillow ChartOptions I've Considered- Sell the house and immediately buy another property that is more desirable.
- Sell the house and rent. Wait for a better value buy in the marketplace. (Another benefit of this option is I could move to a more affordable area).
- Keep the house, rent it out (probably around break even for this house, maybe a slight profit). Rent an apartment and save for the 'forever' home.
- Keep the house, stay in it for a few more years at least, continue to save money as much as possible and decide later
What would you do in my situation, if you knew you did not want to live in this home for a long period of time, and you wanted to make the most financially sound decision possible?