What should we do with our house? Sell and pay off debt? or rent and build money/equity?
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We're moving and considering our options on what to do. We have a total of about 30K in debts from a student loan, a home equity loan, and an auto loan. We also have a home where we still owe the same amount as when we first purchased it, but the value of the house has increased by at least 50%. We both have good jobs and are able to pay down the debt that we owe at a rate of about 5-7K/yr. We are considering two options for our future finances. Which one is better?
A) If we sell the house, we could sell it for enough of a profit where we could pay off our 30K in debts, and still have enough money to put down 10% on a new house. The money that we are using to pay off debt would now become additional income for us. So we could be entirely debt free.
B) Keeping the house and opening it up for a rental property. We would have to continue to pay off our debt, but at a faster rate b/c we have a new source of income. This ~$500/mo could be long term after our debt is gone.
A or B?
What should we do with our house? Sell and pay off debt? or rent and build money/equity?I did hold onto my Residence and Rented it out through my Military Moves -- and it did provide me with the Benefit of having a house just about ready to be paid off totally when I Retired from the Military.
The DOWN Side of renting -- get a reputable Real Estate Agent -- so you do NOT have to mess with qualified renters -- they will take care of that for you. The Horror comes in when you have renters -- because no matter how well screened -- they will NOT take care of your property like you would -- and things break, doors get damaged, rugs get messed up, etc etc etc. So although it did help me to cover the mortgage costs while I was Stationed out of the area, I did have to cover maintenance costs, and repair costs, and the damage bills as well.
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