▲
2
0
▼

Financial Advice: How can I rent out my house and move into a smaller place?


               
2018 May 26, 11:11am   10,459 views  46 comments

by alpo   follow (0)  

I own and live alone in a $2M house (the "shack") in sf bay area with 80% equity. I want to rent out the shack and buy and move into a smaller townhouse. Renting out the shack will generate a rental income of $2000 per month (current mortgage payment is $2000 and prop tax is around 12000 per year). Besides the house i have $50K in 401K and $100K cash in bank. I make $220K an year total. I am trying to find ways in which I would rent out the shack and buy and move into a smaller town house.

The main issue I am dealing with is whether I should pay down the remaining mortgage ($400K) on the current house, save for a downpayment for new townhouse and move into the new townhouse, etc. Trying to figure out what to do?

Comments 1 - 4 of 46       Last »     Search these comments

1   Strategist   @   2018 May 26, 11:37am  

1. Rent out the bedrooms, and keep living there.
2. $5,000 per month rent for a $2 million home is too low. Im sure you can get $7,000 or $8,000.
3. Get an equity line and pay cash for the townhome you want. As your old home will be an investment, all the interest will be deductible.
4. Retire, and travel the world with a hot girlfriend.
2   BayArea   @   2018 May 26, 12:00pm  

Renting out $2M homes generally doesn’t result in good roi.

I understand you bought for much less
3   BayArea   @   2018 May 26, 12:03pm  

Strategist says
2. $5,000 per month rent for a $2 million home is too low. Im sure you can get $7,000 or $8,000.


Not very many people rent houses for $8k. See my post above.

People generally buy excess, but rarely rent excess. That’s why rent:buy ratios in affluent areas are 3-4% while 7-10% in low class areas.
4   mell   @   2018 May 26, 12:08pm  

Agree with bay area. 5k per month is prob what you'll get. Renting out luxury homes is not good roi unless you run a nightly air bnb at a hot tourist spot. I'd consider selling here, you're likely close to or at the top.

Comments 1 - 4 of 46       Last »     Search these comments

Please register to comment:

api   best comments   contact   latest images   memes   one year ago   users   suggestions   gaiste