Less than 100k & 9 yrs remain on my mortgage. Last appraisal was 152k (5acres 2000 sqft). I have an opportunity to purchase a <10 yr old 2000 sq ft home with an adjacent 1000 sf guest house on 3 acres for 180k that appraised for about 250k.

Would it be wiser to just sell prop 1 and use the equity to purchase prop 2, or should I use the equity I can borrow from prop 2 to pay down, refi, and rent prop 1?

Really in uncharted territory on this one. Would greatly appreciate opinions from those with real estate experience?

2 ...

Report Post

Posted by Latebloomer

Passing through

Member since Jul 2012

262 posts

Posted on 7/29/13 at 6:39 pm to OneFifty

It will depend on what you can rent property 1 for. Would the rent cover the mortgage payment, taxes & insurance? Do you need the acreage that it is sitting on? Usually rentals in town on a regular lot cash flow better than a house out on acreage. How much cash were you plannning on putting down on property 2 if you don't sell property 1? Why would you want to refinance Property 1 if you keep it - is the interest rate above 4.5%? Just a few things to think about.

1 ...

Report Post

Posted by Ric Flair

Charlotte

Member since Oct 2005

13681 posts

Posted on 7/29/13 at 10:08 pm to OneFifty

Sell property one. Buy property two. If you're itching to be a landlord, rent the guest house out on property two to get your feet wet.

How much would property one be worth if it was on a 1/4 acre lot? Acreage doesn't really increase what you will get for rent, plus you pay additional property taxes due to increased value from the lot, and have to mow five acres weekly in the summer.

2 ...

Report Post

Money Talk - Replies to Post

Return To Board

Page 1

Return To Board