Hi! Jeannie-stache here!
I'm hoping a more experienced landlord can chime in and offer some advice. We currently own two homes in Philadelphia. The dilemma is whether to sell one or both of our houses, turn them both into rentals, or hold onto one and sell the other. Which one makes most sense financially? We've been back and forth.
We just completed paying off $50,000 in student loans in 6 months after jumping on the STACHE-train! Whahoo! However, while we are very happy to now have NO DEBT besides these two mortgages, we have very little cash on hand right now. We have $10,000 in savings and want to move as soon as possible to be closer to my husband's work and have more room for our family. We are squished into a tiny 2 Bedroom house, with a baby and my sound booth (I'm a professional voice over artist) sharing a bedroom. Plus we want to have another baby soon.
If we chose to stay in our current house until we had 20% down payment to avoid PMI, it would take us about 5 or 6 months to save the amount needed.
So, here's the story:
House ONE:
We could sell it for: $200,000
We owe: $150,000
Mortgage payment per month: $750
We are getting: $1500 per month in rent
House ONE is currently a rental property. While nice, the area isn't a particularly desirable one, and the house is old. Much of it has been renovated (new kitchen, nice bathrooms, etc) but it has very old wood floors (not in a nice way), no central air, and old plaster walls. It currently needs $5,000 in stucco repairs and about $1000 in other random repairs.
The second house:
We could sell it for: $325,000
We currently owe: $252,000
Mortgage payment: $1751.00 per month
We could get: $1900-2000 per month if we rented it
House TWO is in a very up and coming area of the city. Everything in this house has been re-done. It's shiny and newly updated with an enormously desirable roof deck. We both feel that if we held onto House TWO, that it would significantly increase in value in the next 10 years because of the area in Philadelphia that it is located in - its an area that seems to already be appreciating quickly.
Advice please!!!