My husband and I have lived in our house for 4 years. We live in a small town and bought it off-market with a USDA loan for 128,000. Our current estimated value is $167,000, and we plan on remodeling our basement soon. This will turn our 2 bed 1 bath into a 3 bed 2 bath plus 2 windowless bedrooms/offices.
We have already decided that we want to move in the next 5 years and buy a farm with at least 15-20 acres. Looking around at local prices, this will likely cost 600k ~ 900k. If we're able to secure a large farm (20 acres+) we'll likely split up the land and have a family member move onto it, leasing his plot from us.
I think it would make the most sense to sell and use the profits to move, but my husband wants to keep this house and rent it out. I understand his perspective, because in the future we have been planning on investing in rental properties. He is an experienced contractor and has extensive knowledge in building code and even does home inspections outside of his day job, so the likelihood of us having to hire out property maintenance is pretty low.
Currently we make around 110/k a year, which in my area (rural Ohio) is middle class. We'll probably be making more when it's time for us to move. But I'm looking for the option that would be cheapest for us while being mindful of setting us up for the future.
So, do we sell or rent it out? What should we do to make it happen? I don't want to get stuck in a temporary rental, we have two very large dogs so it would be difficult to even find a place to stay while we're in the middle of moving.
thanks!
Need help with a 5-year plan to rent out my current house and buy a farm
byu/milliemargo inRealEstate
Posted by milliemargo
5 Comments
You don’t have enough equity in the property to make much from a sale after deducting all the sales costs. What kind of positive cash flow can you expect from a rental? Can you get good tenants? What kind of repair and maintenance costs are you looking at?
I highly doubt your rural home went up 30% in value in the last 4 years. You bought just post covid and that’s when prices were very high. Not much of the country has seen increases of 30% since.
I would not build non conforming rooms. Save your money
You are not likely to get top dollar even with renovations. You probably can cover your costs on renting to a long term renter over the next couple of years. I’m sure you can downsize until you fjnd a decent little farm. Not smart to over extend just to have a rental.
I am not sure you can list something as bedroom if it doesn’t have windows