Excited for the Future

Mom987 · December 2013

So we've been in our home for 3.5 years and are working to pay down the mortgage. Great school district but the kids are still 9 months and just turned 3, so another 2.5-3 years til the actual school year begins for our first son. In the next few years, DH mentioned that he wants to look at bigger houses and more property in a better school district, and I'm excited about it! I know A LOT can change in 2-3 years, but would you try to sell your current house or rent it out? I'm leaning towards renting if we find a good rental company and tenant... Just thought I'd share and see your thoughts.

Mom987 · December 2013

Violetwater24, thank you for your response! Definitely helpful.

jtmh2012 · December 2013

Another factor to toss in here would be what do you plan to use for the down payment on the next house? While we would have liked to have rented the old house, we wanted the equity out of it to allow us to buy the next house as we wanted to upgrade somewhat.

Rainzzzy · January 2014

I really hate being a landlord but I have to rent a place out while I wait for prices to come up a bit. Total PITA even with good tenants. Not everyone hates being a landlord, but many people do. And I haven't even experienced the horror stories of some landlords I know (tenants who don't pay, trash the place, call and complain about every tiny issue, or cause problems with the neighbors). Just some things to keep in mind!

Mom987 · January 2014

Rainzzzy I'm totally with you. DH isn't very thrilled about possibly renting, either. We bought the house for $192,900, but sadly, others in the neighborhood in the last 3 years have sold for like $160,000, ugh. We've been able to pay our principal down to $158,000 and counting. We're still deciding on whether to keep throwing money at this house vs. keeping it very liquid for down payment on next house. The 2-2.5 year range is just for our first son to start kindergarten, so if we had to do another year or two, that'd be fine probably.

short+sassy · January 2014

Something else to consider is it can be much harder to get financing for a second home, if you aren't selling the first one. In addition, your homeowner's insurance and (possibly) property taxes are usually higher for a rental.

I personally own a duplex. I live on one side and rent out the other. I like being a landlord and it has worked out very well for me (best financial decision I have ever made) but, like Rainzzy said, it can be extra stressful even in best case scenarios. I suggest a higher than normal emergency fund...because that is two houses to maintain...plus you are going to have periods of time when you will not be receiving rent. Such as between tenants. If you can't afford to pay both mortgages without rental income for at least 1-2 months (possibly longer, depending on your rental market), then I would strongly suggest just selling the first home and not consider the rental option.

Mom987 · January 2014

Thank you everyone for your input! Definitely helpful.

latefortheball · January 2014

I think it also depends how comfortable you are with two mortgages. I know here in NY they won't consider rental as income in the sense that it will "wash" out your first mortgage. It still counts against you when buying a second home. And then the whole being a landlord thing. Unless you get the right people as tenants, it could definitely be a huge headache!

Excited for the Future

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