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So, at what point is it considered “ghosting”?😐
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Any Property Management recs in Seattle area? :(
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Yeah basically a $5.5K mortgage with a $7K biweekly paycheck since I’m putting 10% down. Potentially our HHI could double in a couple years, and hoping rates come down. But two big If’s there.
Mentor
are the renovations necessary, just nice to haves, or a mix of both?
If nice to have you could hold off on the reno for a year or two and build a bigger cushion while renting the other property.
So essentially a $1M home with $350k HHI at current mortgage rates? Might be a stretch. Would sell the primary and move the equity into the new home
Subject Expert
If your renovations can add value, this isn’t a terrible idea as I think most people expect interest rates to drop in the next 6 to 24 months, and you may be able to refi to not only a lower rate but also no PMI.
If you think the renovations will run $150k, I’d set $180k aside for it because renovations always seem to run over. In that situation, you seem stretched a little thin on your budget. If you can pay for some materials on a CC that has a 12 to 18 month 0% intro interest rate, that might help stretch it a bit. If you have other assets you could potentially tap into if you need to (brokerage assets, RSU’s, etc), that would make me feel a bit more comfortable.
$1k per month in cashflow on the other house sounds nice, but knowing you have some big expenses that might be coming around soon, and being stretched thin across 2 properties, I would lean towards selling and moving on.
Renovating two original bathrooms that’s outdated would run $35K, replacing laminate flooring with hardwoods would be another $15k, and replacing deck and building screen in porch is $75K. The last one is the one that probably isn’t “necessary” right now that I’m considering saving for next year after bonuses roll in
Mentor
Without knowing anything else, I would agree with the bathrooms and the flooring. Bathrooms are a necessity for your family and guests, and hardwood floors are good not only cosmetically but tend to increase property value (apparently a lot of buyers like seeing hardwood).
I think holding off on the deck for a year or 2 would be financially smarter, just so you don’t deplete your savings.
Rent that thing! That kind of cash flow is amazing.
Subject Expert
$2100 rent + 10% vacancy reserves + 10% maintenance reserves + 5% property management (aka paying yourself, real property management is likely 8% to 10%) = $375 “actual cashflow”. We already know the HVAC will be needed soon, so you probably should be saving 20% to 25% towards capex alone (HVAC could be $15k - $20k fairly easily… that eats away 2 or 3 years of your “best case cashflow” alone!)
You can’t assume that nothing will ever go wrong, or that you’ll never have vacancy, or that managing a property is effortless. Those are the exceptions, not the norm.
OP - what did you end up doing? I’m in a very similar situation. Including towards renting out current primary but feel like we will be really stretched thin.