I recently decided to buy a rental property (House B) in my area that breaks even/would cash flow pretty well. However, I decided to get a primary home mortgage on it thinking that I would sell my current home. Initially I had thought that I would sell my current house and just move in before the holidays.
However, due to the supply chain issues for skylights, my current house (House A) is pending a big roof repair that is TBD for the next month. I can sell it…but basically there is a giant black tarp covering the back half of my house and agents I talked to said that they would prefer I wait until this is resolved. Unfortunately, that may be in November (like Thanksgiving), where they are also saying would be slower.
Conversely, I also have some bites on renting out my new house (House B) doing short term 30 day rentals but this isn’t going to be consistent yet (its the slow season, I don’t have any reviews yet). I also have some bites renting out my old house (House A) but they want to tie up the lease for 2 years to end again in November (which brings me back to the same predicament).
Do Nothing, Pay Both Mortgages (~$4k/month) and Wait until Spring. Avoid Renting out House B at all due to the agreement with my lender. I do have some extenuating circumstances here though… Rent out House B Short Term ($200/month Profit, Mortgage Covered), Live in House A. Sell House A. Net $400k in gains but potentially lose ~$40k for trying to sell it during Thanksgiving. Move to House B. Rent out House A but tie it up for 2 years (Net $600 profit/month).
I’ve seen some posts here about buying low and keeping rentals- which is exactly what House A is. My mortgage is $2k/month and I can rent it out for ~$3k/month. On the flip side, taking $360k and earning a 5% gain on it per year buying index funds is also really tempting…
What would you do? I have no desire to buy in less expensive markets where returns may be higher but risk is higher and I’m more removed from it…I just want to earn enough to hedge inflation, cover my expenses and save for retirement.