Decisions Decisions... Need Advice

[dream16]

You should look at how many rentals are in Irvine.  There's like 500+ rentals.  Don't assume that it would be rented out for $3,000.  It might take a couple of months for it to be rented out and the tenants might move out after one year and then it'll be empty again.  There's also that liability aspect which comes with being a landlord.  I'd run a calculator on a couple of scenarios and see what works best for you. 

There's more than 2 options.  Instead of putting 50% down why not put down 15% down and put the rest in bonds and stocks?  Then you'll have lots of money on the side in case something happens. 

Personally I would sell the home and move out of Irvine to a place with low property taxes.

I've already rented out over half a dozen properties in Irvine this year and ALL of them rented out within 1-2 weeks with multiple applications (ranging from $2,100/mo to $3,500/mo).  Trust me, the rental market is very strong right now. I do agree that $3,000/mo in rent for a 2-bedroom is a bit must even in Irvine....newer and larger 2-bedroom condos rent out for $2,600/mo to $2,800/mo.

Sorry but it took my agent 2.5 months to rent out my condo, NOT only was it brand new, but also BIG in size compared to the ones in my neighborhood, so i don't know how you have multiple applicants fighting for a condo in 1-2 weeks to grab it.

PS: i bought in Portola Springs though

 

[pricedoutJay]

It seems like many are saying Option 1 is the way to go. Bones' option 3 is probably what would make the most sense in a long run.  I mean according to that book Millionaires Next Door, that's how most of the typical American millionaires live, in a modest comfortable house, small business and/or a lot of saving through frugal life style.

I would say, though, for Option 3, both hubby and wife have to be in a same boat and have same goals.  Often this is not the case.

Being landlord is not having a "passive" income for most of us.  There are exceptions, but it could be a lot of work and definitely a lot of responsibility.  Irvine may be another exception since it's so popular now.  My experience is that most of the "landlords" I know are either folks with no kids to raise, doing it full time with many properties, jobs/business with flexible hours, and might have been already exposed to real estate industry like their parents working as professionals, have a mentor who's been successful, or relatively wealthy and can afford property management and legal experts.

Just like anything else, one can become landlord (or day trade, start selling stuff on line, home business, start blogging, youtube channel) but it requires a lot of preparation, managing, and learning to make any money off it and keep making it...

 

[dream16]

It seems like many are saying Option 1 is the way to go. Bones' option 3 is probably what would make the most sense in a long run.  I mean according to that book Millionaires Next Door, that's how most of the typical American millionaires live, in a modest comfortable house, small business and/or a lot of saving through frugal life style.

I would say, though, for Option 3, both hubby and wife have to be in a same boat and have same goals.  Often this is not the case.

Being landlord is not having a "passive" income for most of us.  There are exceptions, but it could be a lot of work and definitely a lot of responsibility.  Irvine may be another exception since it's so popular now.  My experience is that most of the "landlords" I know are either folks with no kids to raise, doing it full time with many properties, jobs/business with flexible hours, and might have been already exposed to real estate industry like their parents working as professionals, have a mentor who's been successful, or relatively wealthy and can afford property management and legal experts.

Just like anything else, one can become landlord (or day trade, start selling stuff on line, home business, start blogging, youtube channel) but it requires a lot of preparation, managing, and learning to make any money off it and keep making it...

There's no free lunches out there man, gotta take the risk to make it big, it can misfire certainly, but to live in fear and not do it is not the way to live life either ,

 

[hello]

Hi guys, thanks for all the advice. My gut feeling is to go with option 1. Sell and buy a bigger place for the comfort of the family. I can continue to save and perhaps buy rental property down the road.

If I go with the option of buying larger home should I put 50% down or put less down?

If put less down what would you guys do with the extra money? I would like to have my money work for me and get a reasonable return without huge risks.

I think you are in the same boat as many people.  No one knows where to put their money in these times of uncertainty.  Best advice is to diversity your assets... and dont ever feel you NEED to do something.  Sometimes not doing something is doing something...

 

[paperboyNC]

Regarding how much to put down,

If you inherited a home, would you take out a mortgage on it to diversify? If so, how much would you borrow?