For the BGOL Family in the Real Estate game I got a question.

[doe moe]

I'm up for retirement in 16 years. I own my current home. (completely paid off mortgage)

This isn't the house I see myself retiring in. I want something slightly larger just outside the city of Charlotte. Currently I'm 10 miles from the heart of uptown.

I'm going to look at homes that are $50K to $70K more than my current home value. In other words, county values my house at $350K so my next home price range is $400K to $420K. Not trying to going into retirement with a mortgage. I also understand with recent upgrades to my house, I'll probably get offers for more than what county has valued the home.

Here is the advice I'm seeking.

Do I sell this house outright and jump into the next one with little to no mortgage? This guarantees fastest payoff method.

Do I rent out my current home, buy a new one and let renters of old home pay mortgage for new one? My concern with this method is getting new house paid off fast a possible. Plus the up front hit my savings will take for putting a decent down payment. Keep in mind, took me 10 years to pay off a 30 year mortgage on my current house.

Any advice is much appreciated Family!

 

[doe moe]

Bump evening crew.

 

[Mixd]

Only thing that quickly comes to mind is are you ready to do maintenance on the old crib when renting. Do you or plan to have someone to do minor stuff that needs maintaining when stuff happens.

Do you want to do that into retirement.

Those factors you should plan for in your decision.

 

[doe moe]

Only thing that quickly comes to mind is are you ready to do maintenance on the old crib when renting. Do you or plan to have someone to do minor stuff that needs maintaining when stuff happens.

Do you want to do that into retirement.

Those factors you should plan for in your decision.

Good point, repairs would add to total costs not easily offset with rental payments if I'm using that money to cover mortgage on new home.

 

[Princenubian]

I'm up for retirement in 16 years. I own my current home. (completely paid off mortgage)

This isn't the house I see myself retiring in. I want something slightly larger just outside the city of Charlotte. Currently I'm 10 miles from the heart of uptown.

I'm going to look at homes that are $50K to $70K more than my current home value. In other words, county values my house at $350K so my next home price range is $400K to $420K. Not trying to going into retirement with a mortgage. I also understand with recent upgrades to my house, I'll probably get offers for more than what county has valued the home.

Here is the advice I'm seeking.

Do I sell this house outright and jump into the next one with little to no mortgage? This guarantees fastest payoff method.

Do I rent out my current home, buy a new one and let renters of old home pay mortgage for new one? My concern with this method is getting new house paid off fast a possible. Plus the up front hit my savings will take for putting a decent down payment. Keep in mind, took me 10 years to pay off a 30 year mortgage on my current house.

Any advice is much appreciated Family!

Only thing that quickly comes to mind is are you ready to do maintenance on the old crib when renting. Do you or plan to have someone to do minor stuff that needs maintaining when stuff happens.

Do you want to do that into retirement.

Those factors you should plan for in your decision.

Mixd bring up the most important point to consider.

The good thing is that it’s your old house so you know it’s good bad and ugly.

If u think you can find good renters and sit back and count money w little or no issues I say this is the route.

What u don’t warn to get into is a headache.

Wait it out til you can get max value for your crib.

Carry on…..

 

[doe moe]

Mixd bring up the most important point to consider.

The good thing is that it’s your old house so you know it’s good bad and ugly.

If u think you can find good renters and sit back and count money w little or no issues I say this is the route.

What u don’t warn to get into is a headache.

Wait it out til you can get max value for your crib.

Carry on…..

I definitely got time. Current home got a new roof, new HVAC, new hot water heater.

Haven't updated any major appliances because they haven't stopped working yet.

 

[donwuan]

Buy the new crib and pay it down with what you get out of the other one. That equity is part of your net worth. You can always borrow against it and buy a rental. A $350,000 rental is a tricky market. When it's empty your holding cost will be pretty high.

 

[doe moe]

Buy the new crib and pay it down with what you get out of the other one. That equity is part of your net worth. You can always borrow against it and buy a rental. A $350,000 rental is a tricky market. When it's empty your holding cost will be pretty high.

Another dope point!

Thank you!

 

[scullydog]

Bruh, you kinda answered you own question. If the county is appraising your joint for 350k, it is worth more than that. You will more than likely sell the house for 400k. If you are looking for a house in the range of 400k-450k you can negotiate the price down to 385k-400k, depending on where the numbers are. You are basically doing a trade. This is a great idea to sell your house and be able to walk away free and clear from you next purchase. Frankly, you really don't want to hold a mortgage when you don't have too. On the other hand. Owning two properties always give you leverage. Meaning when you get through with the second house, you now have two properties. Properties always go up in price over the years. When you are finished with the other house, you will have two houses that maybe 600k and above. Depends on how much you want to struggle.

 

[Princenubian]

Buy the new crib and pay it down with what you get out of the other one. That equity is part of your net worth. You can always borrow against it and buy a rental. A $350,000 rental is a tricky market. When it's empty your holding cost will be pretty high.

Another dope point!

Thank you!

It’s not really a dope point unless I’m misunderstanding. No offense Don.

If you already have a rental that you know all the one and outs, stick w the evil you know.

You can buy a rental, rent it out and get 50 phone calls every time there’s a heavy rain.

As I’m typing this I get an alert that ceiling is leaking at CFP title game



Jesus working in his mysterious ways. Lol

Carry on…..

 

[donwuan]

It’s not really a dope point unless I’m misunderstanding. No offense Don.

If you already have a rental that you know all the one and outs, stick w the evil you know.

You can buy a rental, rent it out and get 50 phone calls every time there’s a heavy rain.

As I’m typing this I get an alert that ceiling is leaking at CFP title game



Jesus working in his mysterious ways. Lol

Carry on…..

Just my thoughts homie. You have experience renting $350000 houses?

 

[PsiBorg]

Have you heard of a 1031 exchange? If your home has appreciated in value, if you sell it, there will be "Capital Gains Tax" to pay.

If I were you, I'd look to see how much the new home will cost (at least what the down payment would be). Then, I'd take out a "Home Equity Line of Credit" on the old house, and use that for the down payment on the new house.

Then rent the old house "as is." Just make sure that the rent can cover the mortgage on the old house, and part of the payment on the new house.

You can possibly capture appreciation values on both.

 

[doe moe]

Have you heard of a 1031 exchange? If your home has appreciated in value, if you sell it, there will be "Capital Gains Tax" to pay.

If I were you, I'd look to see how much the new home will cost (at least what the down payment would be). Then, I'd take out a "Home Equity Line of Credit" on the old house, and use that for the down payment on the new house.

Then rent the old house "as is." Just make sure that the rent can cover the mortgage on the old house, and part of the payment on the new house.

You can possibly capture appreciation values on both.

Haven't heard of the 1031 exchange but I'm researching it now.

Thank you for sharing.

 

[doe moe]

Capital Gains Tax On Real Estate And Selling Your Home | Bankrate

When you sell your home, you may be subject to a tax on the profits you make. Here's how capital gains tax on real estate works.

www.bankrate.com

You can sell your primary residence and avoid paying capital gains taxes on the first $250,000 of your profits if your tax-filing status is single, and up to $500,000 if married and filing jointly. The exemption is only available once every two years.

I appreciate you Brothers! Your knowledge is truly wealth.

 

[Mixd]

Capital Gains Tax On Real Estate And Selling Your Home | Bankrate

When you sell your home, you may be subject to a tax on the profits you make. Here's how capital gains tax on real estate works.

www.bankrate.com

You can sell your primary residence and avoid paying capital gains taxes on the first $250,000 of your profits if your tax-filing status is single, and up to $500,000 if married and filing jointly. The exemption is only available once every two years.

I appreciate you Brothers! Your knowledge is truly wealth.

I'd tell you speak to a professional, BUT on a crib you can defer capital long term gains "indefinitely". Secrets of the rich... Research it.

But back to selling your crib later to buy a new one, just remember as your current home raises in value later, so will the cost of that other crib and area values down the line.

 

[PsiBorg]

Capital Gains Tax On Real Estate And Selling Your Home | Bankrate

When you sell your home, you may be subject to a tax on the profits you make. Here's how capital gains tax on real estate works.

www.bankrate.com

You can sell your primary residence and avoid paying capital gains taxes on the first $250,000 of your profits if your tax-filing status is single, and up to $500,000 if married and filing jointly. The exemption is only available once every two years.

I appreciate you Brothers! Your knowledge is truly wealth.

Also though, there's a "Like-Kind" element in the 1031 exchange as well.

Let's say you bought your house for $100,000 and it's worth $250,000 now. $150,000 would be taxable. If you sell it, as long as you buy another house for $250,000 or more, you'll be able to defer paying the Capital Gain tax.

Get a professional on it like someone already said.

 

[Princenubian]

Just my thoughts homie. You have experience renting $350000 houses?

No disrespect intended bruh

I live in the N Bronx which is still very desirable areas in the B-X.

Houses here are waaay north of that amount and there always seems to be a surplus of renters.

Getting good tenants is another issue.

Location is most important in making this decision.

Carry on…..