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Hi guys, first time poster here. I got into a house for 162,000 about 2 1/2 years ago. I estimate with our local market in Minneapolis, that the improvements we've done to the house and the general economy has raise the house to be near $300,000 value. I'm wondering if I should sell the house to cash in on the equity and move into another fixer-upper or stay as we are getting some rental revenue from the basement.
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Welcome to SA. Wonderful the housing market in Minneapolis has turned upward so robustly. There isn't enough information and so many unknowns. What were your initial costs?
How much in fees, taxes, interest have been disbursed so far?
How much did you spend to update/upgrade the house?
How many hours work went into the project?
What are your carrying costs?
What are other houses in the district/community of similar square footage and lot size listing at?
More importantly, what are they selling for?
Who is your target market?
Do you plan to list, show and sell FSBO?
Do you plan to hire a realtor?
What is the commission?
Generally, the rule is to live in a house 5 years to lock in appreciated value. There are so many costs associated with buying and selling a house. You must work out those as well. What will you net is the question!
There are other financial factors like your own financial management, cash flow, budget etc -
A couple of things; let's assume the houses don't appreciate any more.Originally posted by niffkid View Post
What's your return on the basement rent on equity?
What do you think you can get as a return once you buy the new house and invest the remainder?
Now, what if the houses appreciate?
You can add the appreciations into those numbers.
Chances are houses in better neighborhoods appreciate faster, but only you know the local market.
Note the fixer-upper, as soon as you fix it, normally, you get an immediate appreciation.
Now, what if the houses depreciate?
You can substract the depreciation.
Nice neighborhoods normally depreciate slower.
There are other variable to consider of course, above is just something that came up immediately.Comment
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in regards to this:
How much in fees, taxes, interest have been disbursed so far?
?
How much did you spend to update/upgrade the house?
We have about 40,000 cash that has gone into the house and took out a 20,000 home equity loan to finish the basement.
How many hours work went into the project?
a bunch- but im kinda into that kinda stuff.
What are your carrying costs?
our primary, 2nd mortgage, utilites, and home insur., taxes average out to about out 1700/mo. we bring in $1100/mo in rent in the basement.
so $600/month -ish
What are other houses in the district/community of similar square footage and lot size listing at?
a home down the block from us, that is very similar to our house in size, style, and age sold for $300,000 and frankly ours is a little nicer and have a full finished basement and the other is partial
More importantly, what are they selling for?
250,000-300,000
Who is your target market?
idk
Do you plan to list, show and sell FSBO?
no
Do you plan to hire a realtor?
probably
What is the commission?
idk
the more i think about it, the more I realize that we have a pretty good setup as it is. And it is easy for me to forget what we actually put into the home because it was spread out over time and it has been kinda fun for me to chip away at the home improvements. I have just been kinda paranoid about losing the equity in the home in the event of another "2007". But I really enjoy this home, and would be fine waiting out another recession in it.Comment
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Before you leave this idea behind, I suggest it's in your interest to quantify time, material costs, contracted out costs, and work out probables for idk responses. I emphasis, you need to print out your own amotorization chart so that you know how much of monthly 'housings' expense goes to interest, reducing principal, property taxes and utilities.Comment
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