7/14/2012 10:21:11 PM
RE:Rent out current house and move to new one
If you are "just breaking even" and you have $40k in equity, then you are really realizing a 0% return on your $ with it sitting there..
Personally, I would look into the following option: See if you can get a loan using the property as collateral to build your house. If you can do it with nothing out of pocket, and your payment is less that you are paying now on your current mortgage, then this increases your bottom line on your personal income statement. Then, sell the property that you currently live in, and look to invest in a market that you can get a positive return. Right now is a prime time to buy real estate cheap, and with $40k you could definately get 1-2 properties that give you a minimum 10-15% return, this means you will put money back in your pocket every month, while others pay down your mortgage.
We are seeing great cash flow and cheap property here in Phoenix. Rental rates went up 18% in the last 12 months and values are up 32% in the last 12 months. Will that pace stay constant? Of course not, but it is sure making it a SWEET spot to invest right now!
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