The Money Mustache Community
Learning, Sharing, and Teaching => Real Estate and Landlording => Topic started by: warmastoast on February 22, 2020, 08:20:59 PM
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about to get divorced and I may well end up with the house. Property in our area is exploding thanks to some very large tech companies opening new offices/campuses within 5 miles.
mortgage is just under 50% of the current value but it is a bigger house than I need just for myself and some extra income would be good.
ideas/options:
mortgage payment with property tax is about $2.5k per month.
If I rented the house out it would get $3.5 ish per month
If I rented out a room I would probably get $700 per month - I'm not averse to this. I don't know what the tax situation would be though.
Or, should I sell?
$300k with no mortgage would place me further out of the city than I really want to be, if I bought somewhere but if I bought to rent out then that would give me $2k per month rental income and the house/townhouse would appreciate in value but probably not as much as the original house which is in a prime location for families and where no new houses are being built.
help to clarify thoughts would be appreciated.
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Hello. Sorry to hear about the divorce.
In your position I think my first question would be: what do I want my lifestyle to be, and is my former marital home the best place for me to live that lifestyle? If you have kids that's a good reason for staying put, but if you are newly single and without kids is a prime family area really where you want to be? (Also, is it where someone wanting to rent a room is going to want to be?)
Generally speaking single family homes do not make the best rentals - the upkeep is a bugbear and value to rent may not make sense either, although this depends on your locality.
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$700 for a room on a $3500/mo house seems low. I have a ~$3200 mortgage in a fairly HCOL area and market rate is ~$1k.