Author Topic: Got dream job in new city...keep or sell duplex?  (Read 2823 times)

ah64

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Got dream job in new city...keep or sell duplex?
« on: February 12, 2015, 05:21:20 PM »
Hey all,

I've got a decision to make regarding a duplex my wife and I currently own and live in. I just got my dream job as a full-time firefighter/paramedic in a city about an hour and twenty minutes from where our duplex is. I'm unsure if I'll keep it or sell, so I'd appreciate your input.

A little about us, I'm 25, my wife is 21 and we're debt free except for the duplex. I'll be starting at 54k a year with the fire department and since we're debt free our main expenses will be housing (renting for at least a year) and groceries. The rental is not necessary to live the life we want.

As for the house, here are the numbers:

Owed: 89k
Value:100-110k (no good comps so realtor is unsure)
Mortgage + insurance and taxes: 637/mo
Rents: 1150/mo

I bought the house with nothing down using a VA loan and paid market value for it...unwise if I was buying strictly for investment but my wife and I have lived in it for a year and half and wanted the nice neighborhood.

A few things the house has going for it:
1. Good, quiet neighborhood
2. Downstairs tenants have been there 9 years and are never late on rent. Also mow the lawn and take care of snow removal.
3. New roof being put on next month.
4. No major upgrades needed for the next 5-10 years.

Hopefully I provided enough details to get some good, informed feedback. If you'd like more just let me know. Thanks in advance for your input.

Zamboni

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Re: Got dream job in new city...keep or sell duplex?
« Reply #1 on: February 12, 2015, 05:23:10 PM »
I'd keep it.

Check2400

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Re: Got dream job in new city...keep or sell duplex?
« Reply #2 on: February 12, 2015, 06:19:26 PM »
Keep it and make the offer to your downstairs tenants to help find the new tenant-that way they have a sense of ownership about the new person, and will serve as de facto landlords while you're away.  Plus if they know each other they will be happier, which is all that matters. 

Also, being 80 minutes away isn't going to keep you from popping by, maintaining that relationship, and being able to address emergencies as they arise. 

I'm guessing the rents is the projection for when you move out?  Making over $500 a month plus principal payments plus the hidden depreciation costs for tax purposes makes this a great return. 

If you want to sell it, after closing costs, you won't make that much money.  Also, it is too bad you're only 18 months in.  At 2 years of living there as a primary residence you can sell the property with no taxes on any profits made from the sale--but it sounds like that will be minimal. 

waltworks

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Re: Got dream job in new city...keep or sell duplex?
« Reply #3 on: February 12, 2015, 06:27:40 PM »
Sounds like a pretty solid property to keep to me, unless taxes/insurance are crazy high or something. Hang onto it.

-W

27y/oTennesseeRetiree

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Re: Got dream job in new city...keep or sell duplex?
« Reply #4 on: February 12, 2015, 07:38:26 PM »
Are you using your VA eligibility for your home a year from now?

If so do you have enough eligibility remaining to get a home in the price point you are looking at?

Navy Federal Credit Union has some 100% financing options for Veterans and even non veterans with favorable rates and no Mortgage Insurance so don't feel like that is the only way... Maybe get a quad next time.

Oh yeah... Almost forgot... I'd keep it. Owner occupied VA Loan terms are very favorable. Makes for nice cash flow for a rental. And in thirty years (or 15) of the tenants making payments for you and putting money in your pocket you have a nice little retirement income stream. Can't fight fires forever.

ah64

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Re: Got dream job in new city...keep or sell duplex?
« Reply #5 on: February 12, 2015, 08:04:12 PM »
Keep it and make the offer to your downstairs tenants to help find the new tenant-that way they have a sense of ownership about the new person, and will serve as de facto landlords while you're away.  Plus if they know each other they will be happier, which is all that matters. 

Also, being 80 minutes away isn't going to keep you from popping by, maintaining that relationship, and being able to address emergencies as they arise. 

I'm guessing the rents is the projection for when you move out?  Making over $500 a month plus principal payments plus the hidden depreciation costs for tax purposes makes this a great return. 



Thanks for your insight, especially in regards to involving the current tenants in the search for new ones.

The rent projection is for when I move out. The rented unit is below-market at $550, keeping my current tenants is far more important to me than an extra $50 a month right now. The second unit will rent for $600.

ah64

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Re: Got dream job in new city...keep or sell duplex?
« Reply #6 on: February 12, 2015, 08:10:54 PM »
Are you using your VA eligibility for your home a year from now?

Oh yeah... Almost forgot... I'd keep it. Owner occupied VA Loan terms are very favorable. Makes for nice cash flow for a rental. And in thirty years (or 15) of the tenants making payments for you and putting money in your pocket you have a nice little retirement income stream. Can't fight fires forever.

I'm not planning on using the VA loan for our next home purchase. My wife and I will just save up a good down payment over the next year or two since our plan is to own our primary residence free and clear as soon as we can manage it.

I thought about selling the duplex and using the VA loan to get a quad, but the residency requirement kills it for us. We're ready to be in a home by ourselves so keeping this duplex is about all we'd do for rental property for awhile.

Another Reader

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Re: Got dream job in new city...keep or sell duplex?
« Reply #7 on: February 12, 2015, 08:18:16 PM »
Congratulations!  The selection process, at least here, is rigorous and very competitive.

In egregiously expensive Silicon Valley, a lot of firefighters commute from less expensive areas to their jobs.  The schedules make that feasible.  A couple even fly in from out of state!  However, my guess is you can find equally affordable housing near your new job and continue to build your real estate portfolio by purchasing a 2-4 unit property there.  The duplex is not a killer deal, but I would hold on to it.  The financing is likely very favorable and you are close enough to drive over there on your off days to take care of any problems.  A "nice" neighborhood makes it easier to attract good tenants, such as the ones you have.  Good luck with the duplex and in your career!

ah64

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Re: Got dream job in new city...keep or sell duplex?
« Reply #8 on: February 12, 2015, 08:36:35 PM »
Congratulations!  The selection process, at least here, is rigorous and very competitive

The financing is likely very favorable and you are close enough to drive over there on your off days to take care of any problems.

Thanks! You're right about that, the process took about 6 months to complete.

Financing is very favorable, 3.75%...hard to beat.