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Learning, Sharing, and Teaching => Real Estate and Landlording => Topic started by: foggnm on April 30, 2014, 10:21:06 AM

Title: Making a decision to sell
Post by: foggnm on April 30, 2014, 10:21:06 AM
I've recently come to the conclusion that I'd like to consider selling my house and either renting or buying a much cheaper property (probably a condo). Right now my mortgage is about $1160 (with taxes, insurance, P&I). There are 25 years left on the loan. I have been renting out a room for $400/month. But I'd like to have the place back to myself as I'm 39 and feel like some privacy would be nice again. I have an excellent location near the university and have spent considerable money to update the house over the past 9 years. I live in a place where I could stay in my same neighborhood and rent for $600-700 a month. Or I could perhaps buy an inexpensive condo (in a less desirable location). Ultimately, I just feel like I'd like to be spending less of my money on a mortgage (and home maintenance) and more towards savings and retirement. I have no debt (mortgage aside). I make a pretty decent living (~65k/yr), but have some catch up to do on my retirement savings. I just look at the fact that over 25 years, I'll pay mortgage totaling over ~300k for my house and probably have at least $30k or more of improvements that will need to be done in that time.  I could buy a condo for $80k and pay it off in 5 years. Or rent and have a fixed and low payment for a very long time. But I can say that I'm emotionally a bit reluctant to give up my house. A condo does sound great though, as I never use my huge yards (as I'm often doing outdoor stuff away from home, I rarely am outdoors at home). Of course, I can always continue to have a roommate, which really makes the equation a wash. Any advice?
Title: Re: Making a decision to sell
Post by: S0VERE1GN on April 30, 2014, 11:02:33 AM
Looks like you're making your way toward s a full "case study" about what to do next. Maybe do a full case study profile in the ask a mustachian section?

insofar as the home: with your current income and no debt, you should be able to aggressively pay down the mortgage on that house fairly rapidly as well (especially with a tenant) and then you would have the equity to buy a condo in cash if you so decide.

If you're really just looking for some extra privacy, renting the house to a family and moving elsewhere might be a good option. let your tenants build your equity for you, and live on your own in a smaller place. I'm getting the feeling that this is more what you're concerned about?

your options are many! Find the one that makes you happiest and wealthiest.
Title: Re: Making a decision to sell
Post by: FrugalZony on April 30, 2014, 11:59:03 AM
I have looked into the downsizing into a condo option for similar reasons
Make sure you run the FULL numbers. Once you factor in Condo fees etc,
it may end up being way more expensive than your current scenario.
Plus in a Condo you are kind of on the hook for extra maintenance etc, in case that gets decided.
If I were to move into a Condo I'd probably just rent and spare myself the headache of dealing with a board and all the other owner.
Title: Re: Making a decision to sell
Post by: foggnm on April 30, 2014, 12:19:19 PM
I did think about paying down my mortgage quicker. It is just hard to fathom putting more of my monthly income into a non-liquid asset. It is very tempting to cut my monthly living expenses in half and use that money for investing. If I think saving $600 a month by living in a less expensive place, over 10 years invested at 6% is nearly $110K. I won't have $110k of equity in 10 years in my current mortgage.