[‎‎‎‎‎‎‎‎‎Adrian]

Current situation.
Wife with 2 kids (4 year old twins)
Monthly net income $7400 Current house owe $40,000 2% interest payment are $656 monthly house is worth ~150k give or take 10k One car payment $513 owe 11k No other debt.

We want to move and are trying to decide on sell or rent current home? ( I don’t want to be house poor in the new house but I feel like current home is too good of a situation to let it go)

In-laws gifed 5 acres of lake front property we’re assuming (because it hasn’t been assessed yet) it’s worth 75k.

We will be using that as collateral for the loan. Could rent out current home for about $1300 a month would hire property management for $130 monthly.

New house will have to be $300,000 or less more comfortably for us $220k-$250k.

We will be stretched thin financially at either of those prices if we don’t have a renter in the house.

We have the potential to live with in-laws but I’d like to keep that as short as possible obviously.. so just potentially during the actual building process.

Sell the old house use the money on new house and live with in laws while it’s being built

1. ⁠Pay off car (it’s a bad loan)

2. ⁠Live with in-laws and pay the construction loan.

Rent the house (if there a renter in It)
1.net income ~$520 once it’s paid for ~$1200 for life

2. Con potential (probable) repair costs

3. Stretched thin until it’s paid for.

25% of net income rule would be $1850 I don’t think I can make this happen as I’m writing this.

Payments with taxes and insurance (not selling) 300k ~ $3097 200k~ $2236

Payments (selling and 100% profit down-car) $300k ~$1947 $200k ~$1000

Help I’m lost any ideas or ways that can help me make up my mind

[Brandy]

$40k left to achieve a free and clear rental? I’d stay in that house until it’s paid off, pay off the car and then the house, then start saving toward building.

You will kick yourself if you sell that rental, especially at 2% interest.

I’ve rented plenty of my personal homes, no emotional issues at all as that’s what investments are for.

Staying in the home you’re in should motivate you and spouse to buckle down and make progress to get to goal. You CAN have both the new place and the current place, just not now.

Also, I’d seriously look at that build cost, it seems low even for lower cost areas. In my neck of the woods, it’s $100k for a garage, $250k for a 500ft² casita, etc.

You cannot afford a contractor giving you a bogus quote. Contractors OFTEN come in 50% higher than quote and that would be detrimental.

[Christine]

Have you looked into costs to build a home on the lot including permits, impact fees, survey, getting utilities run to it (if applicable) plus build costs with a cash cushion for overages (10-15% on the low end)?

I suspect it’ll be much more than $300k.

If so, that’s your answer…stay in your current home, pay off the vehicle, look for more lucrative jobs/side hustles and save up to afford the build in the future.

[Jeremy]

So, there’s an aspect of renting that’s not financial. Don’t rent out a house that you lived in. Renters will often be hard on a property and when it was your home you take it personally instead of it just being an investment property. Clouds things up.

I’ve never done it but seen it numerous times and it’s very common. You’ll also lose the primary residence tax exclusion on the gains – that will wipe put any interest savings on keeping it.

Sell the house, get in to the new one with as much down and low principle as possible, if you really want a rental buy one specifically with that in mind when you have time to deal with renters AFTER your personal moving and building chaos is done.

[Jule]

That’s not enough money in rent income for that value of a house. Not to mention that your income doesn’t support both houses without a tenant, which you need to account for because renters don’t always pay, you will have periods of vacancies, maintenance, repairs, etc.

Sell the house, use the money to pay off the vehicle and put it all towards the new build.

[John]

“We WANT to move”. Financially you seem to be on a good path. Slow down on this move. Figure it all out. Take your time.

How does this move effect your plan for financial independence, college etc.

Being a landlord can be very stressful.

[Scott]

You lost me at “stretched thin” at the end of the day what is the point of fire? Answer: to create so much margin in your life, that you have mitigated all but the worst of risks, aka.

To be financially free.

So, if you’re about to make a decision that will “stretch you thin” and that little voice in your head was loud enough to ask us, then don’t do it.

[Sickels]

I have a $2300 mortgage and an income of $140k and as a single parent (so no second adult to pay for) this mortgage is a big stretch for me.

I’d stay where you are and save more.

[Dawn]

I’m with some others on here. Stay in current home at minimum until it is paid off & then a little bit more time afterwards to truly decide.

Pay off auto loan asap & start earning or saving more to be debt free faster.

Owning a home outright is the best feeling as it takes so much financial pressure off.

[Author]

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