Author Topic: Trying to plan out my future  (Read 2311 times)

FastStache

  • Bristles
  • ***
  • Posts: 257
Trying to plan out my future
« on: June 09, 2013, 10:22:46 PM »
My current home is currently worth about 215K on the market, and this seems conversative. I still owe about 186K on it. My interest rate is 3.625%. The monthly payment is 1380 with insurance, pmi, and taxes. The house was built in 2006. Once I have 80% LTV, my payment will drop to 1280.

The current market for renting it out is about 1700-1800 per month.

Once I pay down some other debt, which should be all done in a year, I am trying to figure out my next move.

I would like to rent out my current home and move into something much closer to work, and with a smaller mortgage.  I'm paying about 110 per month in tolls alone.

I would be willing to be the property manager myself, but would have to hire people for repairs.

Would this make sense?

MrMoneyPinch

  • 5 O'Clock Shadow
  • *
  • Posts: 82
  • Location: Soviet Canuckistan
Re: Trying to plan out my future
« Reply #1 on: June 12, 2013, 06:07:41 PM »
Seems tight, BUT it depends on what are the other expenses.

For that rent price, do you pay the utilities,  landscaping, other regular fees?

When are the big ticket maintenance items due?(windows, roof, pavement, etc) You should count their amortised price as a monthly expense.

Check for guidelines as for expected vacancies in your parts.  I use 5 percent (1 month every 2 years) and add it as a monthly expense.

Is there still positive cashflow? Then the idea is not stupid. There may be bumps in the way (leaking faucets, bumps, nicks and holes in drywall) so for it to be a *good* idea, you would need a better rent to mortgage ratio.

FastStache

  • Bristles
  • ***
  • Posts: 257
Re: Trying to plan out my future
« Reply #2 on: June 12, 2013, 08:18:11 PM »
From the research I have seen, I would not pay for utilities.  I would offer landscaping  with the rent since I get a good deal of about 45 a month.

HOA is another 75 a month not included.

The house was built in 2006 and is in good condition.

I likely plan on letting it go before I would be taxed capital gains, so within three years. Assuming, the law of living in a home for two out of the past 5 years still applies.


tryan

  • 5 O'Clock Shadow
  • *
  • Posts: 75
Re: Trying to plan out my future
« Reply #3 on: June 13, 2013, 06:06:36 AM »
Quote
Assuming, the law of living in a home for two out of the past 5 years still applies.


The law has changed .... the tax benefit is now pro-rated to the time you lived in the house.  living 2 out of six results in 33% on the tax benefit - for example.

I don't see this thing being a positive cashflow and -therefore - not a positive experience.  Do you want the take the bandaid off fast or slow.  Either way it'll hurt.

FastStache

  • Bristles
  • ***
  • Posts: 257
Re: Trying to plan out my future
« Reply #4 on: June 13, 2013, 01:46:35 PM »
Quote
Assuming, the law of living in a home for two out of the past 5 years still applies.


The law has changed .... the tax benefit is now pro-rated to the time you lived in the house.  living 2 out of six results in 33% on the tax benefit - for example.

I don't see this thing being a positive cashflow and -therefore - not a positive experience.  Do you want the take the bandaid off fast or slow.  Either way it'll hurt.

I appreciate the honesty, but the good thing is I have time.

I'm looking to move into a smaller place, closer to work, so I would be saving money in my overall expenses. The places I'm looking at the mortgage would go up a bit, but no tolls, 30% of the driving distance and much less on electricity.

As the time gets closer if rent goes up I will rent it. if not, I will likely sell.

I'm not in a hurry to move, and if I do I will crunch the numbers and see if it makes sense. I appreciate the resources that have been presented so far.