4 Reasons to Keep Your Current Home AND Buy Your Next Home
As much as I would love every home owner to sell their home to add to the tight inventory of homes, you might be able to keep your current home as an investment property AND buy your next home to live in. Why would you want to do this?
Rents are at an all time high and chances are you could rent your home for much more than your current mortgage payment. Positive cash flow is always a good thing.
Even if you break even with expenses and rent, you are continuing to build equity in your old home and have some great tax deductions that are exclusive for rentals. (https://smartasset.com/taxes/rental-property-tax-deductions)
It’s a great way to diversify your retirement portfolio. Typically if you buy investment property, you have to put 20% to 25% down in cash and interest rates are at least .5% higher. With recent rate increases, your current mortgage interest rate is probably significantly less than what a current investment rate would cost.
If you would really like to increase your income, consider making your home into a short term or even a month to month rental. There is a little more risk than a traditional rental but if managed well, the income potential is far greater with this type of rental. For more information on how to do this check out our Airbnb page.
If you don’t have much debt other than your mortgage and especially if you are a two income family, keeping your current home and buying another home is a real possibility. Here’s an easy online calulator (https://www.calculator.net/debt-ratio-calculator.html) for you figure out your debt to income ratio which is what lenders use to determine how much home you qualify for.
Some people just don’t want to be landlords though and I completely understand. Check my blog next week for information on how you can use your current equity to help you buy your next home.