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Are the <3.5% rates gone for good?
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Subject Expert
Can you sell the first condo to unlock that equity? If your overhead is $2,300 and you can only rent it for $2,000, you’re really losing close to $700 when you account for any maintenance and vacancy expenses.
If you’re only putting $20k down on the next property, then you’re definitely paying PMI which is probably another $300 per month…
Unless there’s a big stock grant that is vesting soon, or a yearly bonus that isn’t accounted for in your HHI, I’m not sure how any of this math makes sense.
We bought our place 3 years ago. It’s a 2 bed room 1.5 bath on the north side
Hello,
An income of $255,000./yr. is $21,250.00/per mo.
$21,250.00 - $5,000.00 monthly mortgage leaves $16,250.00/mo. unless you have gigantic school payments. Even minus Condo payment of about $2,300.00/mo., that leaves about$13,950.00/mo.
It seems that you and your wife are doing quite well financially, and that's great. I have no idea what is all in your budget, but many people including myself wish that they had that good of an income.
By no means am I trying to sound rude in any way, but I don't really see an issue. Otherwise, like the one person said, sell the Condo, put down $110,000.00, you won't have PMI and you will still have a good cushion.
Best of luck.
What is your recommendation?
Wouldn’t do it unless you are good at savings. How old are you?
Are you planning to have kids?
1700 @ 2.375% (340k originally) and 4145 monthly at 6.1% (525k originally)
1/2 of your take home going to the mortgage is quite high, and doesn’t leave you much room for “what ifs”, like a spouse losing a job. You also don’t have enough savings as a cushion. It’s a risky move IMAO.
I would sell the apartment and roll into the house. You can always buy another investment property down the road when you have higher income/cash flow.
Subject Expert
You’re talking about closing timeline? Do you already have the new place under contract?
You can obviously afford the townhouse. That’s not a concern. BUT, why on Earth do you want to become a landlord instead of selling the condo? You aren’t even cash flowing here, so maybe it’s an appreciation play? Just sell the darn thing, buy the townhome, buy some Bitcoin, and move on! =P
Ya that’s the play now. Will look to rent or sell!
When you say monthly mortgage on the 2nd place is $5k, are you including prop taxes and insurance, or no? 50% gives me anxiety, and Im not sure why youre holding onto the condo that isn't cash-flowing, but you know your situation best.
Not yet doing that today
If you are only renting the condo out for $2k and pay $2300 monthly, you’ll lose money with maintenance and any other fees the tenant may have. Id do an Airbnb if it makes sense or just sell it and reduce your current mortgage.
Honestly, keep the condo and rent it out. It will hurt for a few years until interest rates come down.
The equity and appreciation will be worth it in 10 years.
As long as your family can swing current expenses, might as well keep as many properties as you can.
Worse case scenario is that you sell it for extra cash. And at that point, you'll still make more money than most other assets.
Subject Expert
Condos tend to appreciate much slower than SFH, and the S&P 500 has outpaced most real estate appreciation over the last 12 to 24 months. Also, condos are facing increasing costs related to insurance requirements over the past 3 years due to the Florida condo building collapsed and many have high amounts of deferred maintenance. An unexpected special assessment or increase in dues will just further cannibalize both cashflow and long term asset value
Losing money every month even before accounting for maintenance or vacancy reserves is a gamble. It might pay off, but it also might not.
Plan is to stop contributing so much to 401k. I was going 20% Roth and my firm already has a contribution of 3-8%. I will drop to 10% for the next few years bringing up our income making it more like 30-40%
I would probably sell the condo tbh and roll the equity into the new house. I understand long term there may be appreciation and cashflow, but if you are paying 5k plus 300 for the rent differential plus various maintenance expenses on two places plus cost of having a kid… you’re running razor thin.
I hate that FHA loans exist because they have inflated the housing market prices and forced folks to stretch too far.
Hmm..so skip out on this home or buy and try to take the money to lower monthly payment after selling?
As a rough guide your mortgage payment should not be more than a third of your income. Additional to your mortgage you'll need to pay HOA, insurance and still need money to live off and save a bit each month. So, your description above looks like it will leave you house poor.
lol gross or net income? If it is gross this is less than 25%. I contribute a lot to 401k so I will probably pause that