I've posted this in the "Ask a Mustachian" forum, but a little surprised by the answers to "not rent the primary residence." What do you think, real estate experts?
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I live in Portland, Oregon, which has a very hit-and-miss public school system. I was raised on public schools so lean toward having my daughter (3) receive a quality public education, which means we'll likely move to a better school district in 1-2 years.
I own a house worth about 280,000 and owe 200k on the mortgage. I figure I could rent it for $1,500-$1,600 per month today, which would mean a cash flow of about 400-475 per month. On paper, this is attractive.
I also know buying a house in a better school district will be more expensive. Do I hold on to the potential rental long-term, rent it for three years and avoid capital gains taxes, or sell once we find a different primary residence and net 90-100k for other investments and savings?
I've been a landlord before, for about three years, so I know the potential pitfalls. It just seems like a cash-flow positive property like this is a good path toward eventual FI by age 50 (I'm 38). I've sought other rental properties in the past year, but the supply is very tight and competition high.
I have about 28 years left on a fixed mortgage at 3.875%. The house was built in 1924, but has good bones and is in good condition (new tankless water heater, new basement electrical, new shed, new exterior paint, simple landscaping, 8-year-old roof, etc.) ... like all houses requires maintenance but is generally low maintenance.
My mortgage is $1,170 per month which includes the escrow account for homeowners insurance, property taxes, etc., and about $315 per month goes toward principal.
I do have enough of a down payment to purchase a more expensive home (~10% DP for 450k house), which like one poster said is a good position to be in.
Does this change anyone's perception/evaluation of my situation? By the time I move in 1-2 years, I could very realistically get $1,600 per month in rent, if not $1,700.
I put 5% down on the 225k overall price in 2005 (~11k), then spent $35k on a basement remodel to bring the livable square footage from 700 to 1,350.
I've refinanced twice, the first time included wiping out the second mortgage.
In doing a quick search, there is a similar property, a slightly trendier area (1 mile away) asking for $1,800 in rent.
Hard to say what the RE market will look like in 1-2 years, but Portland will continue to be a desirable destination.
If I put my house on the market today, I would have multiple offers within a week. $hit's tight here.
Thanks for reading.