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You’ll get a million answers. Personally, would go the debt free route for my mental state. Is it the most optimal? Nope, but not a bad move and will have minimal risk. Why unnecessarily over leverage yourself
Exactly.. plus I am always afraid about job losses
So, I live in the DMV. Keep the house at all costs.
My parents are millionaires because they bought a 3/2.5 for 98k in ‘99 in McLean.
That area in Centreville is going to be where people go when they can’t afford Vienna or the closer suburbs, so keep it.
$2000, for your PITI is chump change, especially when one bedrooms in that area are going for that much. Rent it for 3500, and save to buy in Aldie or Ashburn, wherever you were looking.
Due to some circumstances, I am expecting some 200k in next few months and I think I can probably pay it off in next 6 months or latest one year (2025). Here is my question
1. Should I use that 200k to buy a single family home in Ashburn/ Aldie (max 1 million budget) area as down payment ? This means put my townhome for rent which I think should yield atleast 3k per month. Property taxes is close 6k and insurance is 1k annually
2 OR should I just be debt free and pay off my townhome. Any savings just goes towards roth 401, after tax roth 401k etc and just normal brokerage (mutual funds, etc)
Some background/ considerations
1. I am definitely not a handyman; so maintenance work will definitely be outsourced
2. I am not 100% sold or keen on single family home. I'm eying it because I've always wanted to have.a source of passive income and I thought I should upgrade to a single family home
3. Total household Base salary - $300k After maxing all retirement contributions, etc, i think our max net pay is 11k/month. We have some equity/ bonuses component but not interested in cashing those out.
4. I dont think mortgage rates will decline that much.
Happy to answer any other questions.
Mentor
What’s your PITI+HOA on the condo?
What would your PITI be on the new house if you used the $200k for the next property?
I wouldn’t just pay off the debt. $200k in the market is probably going to grow much faster than your condo will appreciate. If you do decide to pay off the debt, what would you do with the money you were using to pay the mortgage?
This is fairly simple math. Managing a rental property from afar, especially a condo, isn’t too hard.
Mentor
Depends on what your concerns are.
A property manager means you won’t get called in the middle of the night for a flooded toilet or something like that. But that doesn’t remove the financial burden of ownership.
I think most damages / repairs happen during turnover. Having a property manager is great during turnovers because you don’t need to figure out anything. But if you get someone who moves in and stays 3 or 4 years with no major issues, you’ll feel like the property manager is a waste of money.
If it’s unprofitable at that rate, sell it.
Go debt free option and keep it. Might need to wait for right tenant. You will be thankful you did years from now
Can you invest in a condo vs a house? Much easier to maintain, less expensive and always has a tenant market. If you are heavy allocated into the market, then real estate is a good way to diversify. Cannot always compare market returns vs rent ROI - different risk profiles.
Yup. All depends on if you want to get into RE for passive income. We have 2 condos on rent and it’s been fairly seamless. I live in a single family home
And would never invest to put it on rent.