Author Topic: Save for downpayment or another way?  (Read 1701 times)

Jules13

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Save for downpayment or another way?
« on: November 05, 2014, 10:19:39 AM »
We currently live in a house in a very popular neighborhood where we could get over 2x the amount of our mortgage payment in rental income. 

It's on a fairly busy street and I sometimes think about keeping an eye out for another house on a less busy street to move to, but I wouldn't want to sell our current house...I would keep it and rent it out.

The question is, would I save for a down-payment on a 2nd home or is there another, better way to get around needing to do that, while still keeping the first home?

Thanks.
Julie

Spiliph

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Re: Save for downpayment or another way?
« Reply #1 on: November 05, 2014, 11:05:17 AM »
If you can get 2x your mortgage in rent then I say move asap and rent out your primary residence. Use the additional income to 1) Pay your mortgage, 2) Pay your rent in another street / suburb. Then you can basically save for a mortgage for another home if you feel that you want to buy another home. Better yet, keep renting and invest your additional cash.

Jules13

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Re: Save for downpayment or another way?
« Reply #2 on: November 05, 2014, 11:17:09 AM »
Well, I have 2 kids in school, so it's not as easy as all that.  And, I don't really want to move out of the neighborhood, so we'd just end up paying the same insane rental prices to someone else if we moved and rented. 

If we moved, I'd want to buy another house and stay put for a while.  So, I'm assuming that I would need to save up a down-payment for that....but then just thought I'd check if the real estate gurus had another way that us non-real estate plebs don't generally know about.  :)

I'm not even sure I want to move, but sometimes I do get annoyed with my busy street and that my kids can't just get on their bikes and go.  And the rental potential is very appealing. 


tarheeldan

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Re: Save for downpayment or another way?
« Reply #3 on: November 05, 2014, 11:27:40 AM »
You might consider also that right now you are benefiting from the high rent-to-price ratio.

If you move out and rent, you'll be on the other side of that, cutting into the benefits from renting your current property. If you rented somewhere that the ratio was inverted, that would make more sense. Or, if your current place is fancy and you'd be willing to downgrade. Otherwise it might be prudent to stay put and save for the down payment.

skunkfunk

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Re: Save for downpayment or another way?
« Reply #4 on: November 05, 2014, 11:47:02 AM »
Start by renting out a room.