Purchased an off market house for a decent price in this wild market, out in the suburbs of our city. Our current house is in a very prime location in the city.Unsure of whether to sell it, or rent it out and keep it as an investment property.

The potential of the market changing and a looming recession is making me nervous about how to invest my money regarding this sale. We refinanced our current home in the city in 2020 for a pretty low rate. I’ve run the numbers and essentially it would take about 8 -9 years of renting out city home out to make the combined equity and income/cash profit that we would make from this sale right now (about $23k in equity per year and $7k in rental profit). This is without the use of a property management company, assuming we’d handle that ourselves. Essentially this would mean keeping the money in real estate for at least this long to make it worth it. The money we are planning to use for down payment on the new house is wrapped up partially in some stocks we’d need to sell ( and pay taxes on). So the funds would be taken from stocks into the house. We are potentially able to make $225k profit from the sale, which if we did sale, would pay our new down payment, closing costs, and allow us to make $65k in cash flow. This would replenish our funds and keep us from having to sell stocks to pay for the down payment, as we can withdrawal the money temporarily from some IRAs. The gross $60-65k I would ideally want to reinvest, but concerned that the next few years aren’t ideal for most stock/ mutual fund types investments. Other confounding variables regarding the rental, we have and emotional attachment to the city house, but we also aren’t handy and it’s an old home so we’d probably need to call a handyman almost every time something goes down. Additionally, we’re not sure whether we’ll hate living in the burbs, and sort of want to keep our foot in the door of the city in case we hate it. It’s also much cheaper rent and if our expenses get out of hand in the burbs, we could come back and live more affordably. We don’t have a lot of investments, but have a growing family of 3-4 this year and want to make sure we make good financial decisions. Keeping the rental would drain a substantial portion of liquid assets and savings but we Would still have about 200-300k in stock investments left. Is the real estate long game safer for now? Or is it better to sell, stack and hold our profits to invest more when things change? Also, I feel like I’m blind to other investment options that might be safer/recession proof. open to all suggestions. Thanks in advanced for any insight.

submitted by /u/analogstash
[link] [comments]

The potential of the market changing and a looming recession is making me nervous about how to invest my money regarding this sale. We refinanced our current home in the city in 2020 for a pretty low rate. I’ve run the numbers and essentially it would take about 8 -9 years of renting out city home out to make the combined equity and income/cash profit that we would make from this sale right now (about $23k in equity per year and $7k in rental profit). This is without the use of a property management company, assuming we’d handle that ourselves. Essentially this would mean keeping the money in real estate for at least this long to make it worth it. The money we are planning to use for down payment on the new house is wrapped up partially in some stocks we’d need to sell ( and pay taxes on). So the funds would be taken from stocks into the house. We are potentially able to make $225k profit from the sale, which if we did sale, would pay our new down payment, closing costs, and allow us to make $65k in cash flow. This would replenish our funds and keep us from having to sell stocks to pay for the down payment, as we can withdrawal the money temporarily from some IRAs. The gross $60-65k I would ideally want to reinvest, but concerned that the next few years aren’t ideal for most stock/ mutual fund types investments. Other confounding variables regarding the rental, we have and emotional attachment to the city house, but we also aren’t handy and it’s an old home so we’d probably need to call a handyman almost every time something goes down. Additionally, we’re not sure whether we’ll hate living in the burbs, and sort of want to keep our foot in the door of the city in case we hate it. It’s also much cheaper rent and if our expenses get out of hand in the burbs, we could come back and live more affordably. We don’t have a lot of investments, but have a growing family of 3-4 this year and want to make sure we make good financial decisions. Keeping the rental would drain a substantial portion of liquid assets and savings but we Would still have about 200-300k in stock investments left. Is the real estate long game safer for now? Or is it better to sell, stack and hold our profits to invest more when things change? Also, I feel like I’m blind to other investment options that might be safer/recession proof. open to all suggestions. Thanks in advanced for any insight. submitted by /u/analogstash [link] [comments]

<a href="Read More“>View Full Article

Need More Commercial Real Estate Leads?SAVE 40% this month!

Our commercial valuation calculator was created to evaluate commercial real estate. In 6 quick steps you will know your NOI, CAP RATE, and IRR.

Now you can get your own branded version of our calculator!