Well, my first set of renters is moving out of the house I bought as an investment property earlier this year. Now, I’m left thinking about whether I want to rent it out again or sell it. I’m leaning toward selling it because I absolutely hate debt, but I don’t want to be hasty in my decision.
I still owe on the house I live in, and I took out a home equity line of credit against my house to buy the investment property. Those are my only debts, but they seem really significant to me.
I’d like to sell the investment property and pay off my mortgage and home equity line of credit. I’d love to be debt-free. But if I did that, I’d be losing out on the monthly income I’ve been getting from rent. I also wouldn’t have my mortgage payment though, so I wouldn’t necessarily need as much monthly income.
In an ideal situation, I’d like to sell the rental property and pay off my mortgage and home equity line of credit. Then, I’d like to find a bigger house to move into and use my current house, which would be paid off, as a rental property. Of course in order for that to happen though, I’d need someone interested in buying my investment property and the perfect house for me to move into to come on the market for a reasonable price. Yeah, it sounds hard, but stranger things have happened, right?! Besides, with God, all things are possible.
In keeping the investment property, although I’d be receiving rent, I’d be responsible to pay the property taxes, income taxes on my rental income, homeowner’s insurance, tithes on my rental income, and upkeep. Those definitely eat away at the profits. Selling the house and being mortgage-free, until I find a bigger house to move into, might be a smarter short-term move. Long-term, I’m not honestly sure which move would be better.
I think the main problem here is that I lack the psychic ability necessary to determine the correct action based on the knowledge of future events. In lieu of psychic ability, I suppose I’ll have to rely on thinking, praying, consulting others, and getting professional advice from a realtor.
I’m sure I’ll wrestle with the decision some more, and even after the decision is made, I’ll second-guess myself, but I suppose that’s the way it is with such important financial decisions. In the end though, even a less-smart decision is better than not decision at all.
Article by Randi Millward