Renting or Selling home?

[JAD]

We are a couple in their early 40s living in a 2500 sq ft home which will be paid off by 2027. Mortgage rates are 2.25% and I am paying extra every month.

We have two kids under 8 and we are looking to buy a 4000 sq ft Home for around $750K.

If our goal is to be Debt free by 55 age, would you consider Renting out the Current home or Selling it off? What additional consideration is needed to make that decision?

Thank you.

[Bill]

I would stop paying extra on your mortgage immediately. You would make more just putting it in a cd. With a 10 year horizon, I would actually be putting that money in the market at this point.

Also, I would strongly argue against the need for a 4000 sq foot house for 4 people, but it’s your money. Just make sure you put those numbers on paper so you see how much of your remaining life you will end up working to pay for that unnecessary space.

Unless you specifically bought the current house to be a rental, the chances of it being a great rental financially are about 0%. People who are successful in re make most of the profit up front bu purchasing unit where the numbers are in their favor. Very few single family homes meet their criteria.

[Author]

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