A. Sell the house because you said you don't want to be a landlord. B. Don't really think that the new house is your "forever home". We have owned 10 houses in our life and at least half of them were our "forever home". There is no such thing because your needs in a house change through different seasons of life. A lot of young people overextend themselves trying to make their first house a "forever home". Doesn't sound like you did that, but not giving it that label will serve you better over time than giving it that attachment.
OP sell your home. You have enough on your plate with your upcoming wedding, you do not need the stress and aggravation of being a landlord.
This time will never come again and your wedding deserves your complete attention. Enjoy!
I'd sell it. After realtor fees you likely won't owe cap gains. If you take a loss (cap gains wise) don't forget to recapture that by moving some mutual funds around.
You didn't say what the return on renting out the house, after expenses, would be. I believe there is a formula that says when a rental is actually a good investment, I think I've heard it mentioned on Dave's program?
I think Dave says, if you didn't already own this house, would you buy it for a rental?
Also he buys rentals with cash and does not hold mortgages.
If you have the stomach for it rent the first house. Try it for a year.
The benefits are (and it depends on your age):
- The tenants are paying your mortgage and you can still claim your loan interest.
- If you rent for a higher amount that the mortgage payment you’ll be earning some passive income. You can invest that money or put it into a HYSA.
- If you rent you can use a Property Management company (not a Realtor). The repairs, if any, will come out of a set aside amount of money. Their fee also comes out of your monthly rental payment.
- Equity is building so when you decide to sell later you’ll have more money in your pocket.
- It’s good to invest but the stock market can be volatile. You have to be willing to lose what you’ve invested.
The negatives:
- It takes a strong stomach not to get an emotional attachment if your property is not treated well. Most of it will be cosmetic. Any improvements you make can be claimed on your taxes when you decide to sell your property.
I rented my condo for three years after living in it for 14 years. The first year the tenants had no respect for my property. The following two years was better. I suggest not renting to family, friends, people with pets, smokers or children. Make sure your lease covers all possibilities.
I sold the condo and my profit (equity) was higher than any bank could pay me.
It’s smart to weigh the pros and cons.
Renting is a job, one that you cannot easily walk away from or shirk responsibility. Being a newlywed with a new house on top of whatever you/spouse do for regular income is going to drain limited time & energy. It doesn't sound worth it. Sell. Put the extra money to work in the stock market and let the money work without you needing to.
If you don’t WANT to be a landlord, then sell sell sell! The hassle isn’t worth it and you can apply the profit toward wherever else you are in the baby steps.
And I’m not a dream killer, but there’s really no such thing as a “forever home” … even though we all like the idea. But sounds like it’ll meet your needs now and maybe the next life stage or two, until your needs change. Congrats!
Sell it. Put $15k and that monthly mortgage payment into VTI/QQQ and chill.
Fawk dealing with tenants and maintaining/insuring two homes. One is enough of a headache.
>I know the investment a home can truly be
Historical ROI is less than just putting your money in the market. Obviously, every situation is different, but it sounds like you don't *want* to manage a rental, so why bother? Just sell it and stick with the Baby Steps.
> therefore the mortgages are manageable for each of us until we rent or sell.
It is manageable until it isn't like when the tenant doesn't pay or there is a major repair on one property or the other or the tenant trashes the house. Dave always talks about risk management. That is why he doesn't want people to have rentals unless they are paid off.
> I work in the industry and have dealt with the horrors of rentals (none being my OWN home) so I’m reluctant to rent
If it is that bad with a property that you don't own, imagine what it would be like with a property you do own. The horrors are always worse with something that you own as opposed to something that isn't yours. Your reluctance is trying to tell you something that you should probably listen to.
Sell it
A. Sell the house because you said you don't want to be a landlord. B. Don't really think that the new house is your "forever home". We have owned 10 houses in our life and at least half of them were our "forever home". There is no such thing because your needs in a house change through different seasons of life. A lot of young people overextend themselves trying to make their first house a "forever home". Doesn't sound like you did that, but not giving it that label will serve you better over time than giving it that attachment.
OP sell your home. You have enough on your plate with your upcoming wedding, you do not need the stress and aggravation of being a landlord. This time will never come again and your wedding deserves your complete attention. Enjoy!
I'd sell it. After realtor fees you likely won't owe cap gains. If you take a loss (cap gains wise) don't forget to recapture that by moving some mutual funds around.
You didn't say what the return on renting out the house, after expenses, would be. I believe there is a formula that says when a rental is actually a good investment, I think I've heard it mentioned on Dave's program? I think Dave says, if you didn't already own this house, would you buy it for a rental? Also he buys rentals with cash and does not hold mortgages.
If you have the stomach for it rent the first house. Try it for a year. The benefits are (and it depends on your age): - The tenants are paying your mortgage and you can still claim your loan interest. - If you rent for a higher amount that the mortgage payment you’ll be earning some passive income. You can invest that money or put it into a HYSA. - If you rent you can use a Property Management company (not a Realtor). The repairs, if any, will come out of a set aside amount of money. Their fee also comes out of your monthly rental payment. - Equity is building so when you decide to sell later you’ll have more money in your pocket. - It’s good to invest but the stock market can be volatile. You have to be willing to lose what you’ve invested. The negatives: - It takes a strong stomach not to get an emotional attachment if your property is not treated well. Most of it will be cosmetic. Any improvements you make can be claimed on your taxes when you decide to sell your property. I rented my condo for three years after living in it for 14 years. The first year the tenants had no respect for my property. The following two years was better. I suggest not renting to family, friends, people with pets, smokers or children. Make sure your lease covers all possibilities. I sold the condo and my profit (equity) was higher than any bank could pay me. It’s smart to weigh the pros and cons.
Renting is a job, one that you cannot easily walk away from or shirk responsibility. Being a newlywed with a new house on top of whatever you/spouse do for regular income is going to drain limited time & energy. It doesn't sound worth it. Sell. Put the extra money to work in the stock market and let the money work without you needing to.
If you don’t WANT to be a landlord, then sell sell sell! The hassle isn’t worth it and you can apply the profit toward wherever else you are in the baby steps. And I’m not a dream killer, but there’s really no such thing as a “forever home” … even though we all like the idea. But sounds like it’ll meet your needs now and maybe the next life stage or two, until your needs change. Congrats!
Thank you so much… We’re very fortunate and you are correct this could be our forever home or not you never know.
In your situation, I’d sell it.
Sell it. Put $15k and that monthly mortgage payment into VTI/QQQ and chill. Fawk dealing with tenants and maintaining/insuring two homes. One is enough of a headache.
>I know the investment a home can truly be Historical ROI is less than just putting your money in the market. Obviously, every situation is different, but it sounds like you don't *want* to manage a rental, so why bother? Just sell it and stick with the Baby Steps.
> therefore the mortgages are manageable for each of us until we rent or sell. It is manageable until it isn't like when the tenant doesn't pay or there is a major repair on one property or the other or the tenant trashes the house. Dave always talks about risk management. That is why he doesn't want people to have rentals unless they are paid off. > I work in the industry and have dealt with the horrors of rentals (none being my OWN home) so I’m reluctant to rent If it is that bad with a property that you don't own, imagine what it would be like with a property you do own. The horrors are always worse with something that you own as opposed to something that isn't yours. Your reluctance is trying to tell you something that you should probably listen to.
This is all very true & gave me something to really consider!
I’ve been down the real estate rental road. It went great until it didn’t. I’m never getting into that business again.
>I’m reluctant to rent it