The Absolute Insanity of Not Buying a Home When You’re Young
cosmic_skillet @ cosmic_skillet @lemmy.ml Posts 0Comments 124Joined 2 yr. ago
cosmic_skillet @ cosmic_skillet @lemmy.ml
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Rather than selling the house, you can consider renting it out if you move. Depending on the terms of your mortgage, you may be only roughly breaking even when you first start renting it out, but after a couple years rent will likely increase so that you're cash flow positive and you're also building up equity in the house.
If you've bought a small starter house 10 years ago then you have lots of options when you want to upgrade. Your starter house should have appreciated and a good chunk of your mortgage payments have gone to increasing your own equity.
So you could sell the starter house and reinvest the profits into a larger house. If you do a 1031 exchange then you avoid paying capital gains taxes, so the starter house essentially functions as an appreciating savings account.
Or you could do a cash out refinance and keep the starter house as a rental property and use the excess equity to invest in the new house.
These are all good options to have. It's going to be rare where you're upset that you bought a starter house 10 years ago and are now looking to upgrade. That's pretty much an ideal position to be in.