patrick.net

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.

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

I understand you bought for much less

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.

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.

Yeah, I bought for $1M. It will rent for a max of $5500 (based on stats in my area for similar rentals). Retiring and travel the world is not an option due to other personal commitment. Selling is also not an option.

I think the main issue in my mind is whether: 1) I should pay down the remaining mortgage on the house (400K) completely and then start saving for a downpayment for a townhouse, 2) rent out the current house (and this will bring income of 2K a month) and move into a smaller apartment to save for downpayment on a townhome, or 3) stop paying down mortgage and start saving for a downpayment for the townhouse etc?

Strategist says

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.

I have 250K home equity line of credit (qualified for 500K) which I haven't used. Plus I am not sure how comfortable I would be with 1.4M of loan (townhome: $1M + my current mortage: $400K).