Should You Keep or Sell Your House? Use This Tool to Find Out in Minutes

BiggerPockets Money Podcast

BiggerPockets

Investing, Education, Business

4.6 • 2.9K Ratings

🗓️ 15 October 2024

⏱️ 46 minutes

🔗️ Recording | iTunes | RSS

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Summary

Should you sell your house or keep it as a rental property in 2024? What you do with your home today could create a million-dollar swing in your portfolio ten, twenty, or thirty years from now. Fortunately, we’ve developed a powerful new tool to help you make the best decision for your financial future! Welcome back to the BiggerPockets Money podcast! If you refinanced your mortgage around 2021, chances are you’re sitting on a low interest rate the likes of which we’re unlikely to see again. The recent rise in rates and home prices has created a “lock-in effect,” where millions of homeowners are disincentivized to sell. But does it make sense to sell if you can roll your home equity into another wealth-building asset? Could you convert your house into a rental and create hundreds of dollars in monthly cash flow? Today, we’re giving you a step-by-step walkthrough of our new “Keep or Sell Your Home” worksheet. We’ll compare four outcomes—selling your home to buy another property, selling your property and investing in stocks, keeping the property and hiring a property manager, and keeping the property and becoming a landlord. Along the way, we’ll use several examples of homeowners so that you can get an idea of where you might stand! In This Episode We Cover A step-by-step walkthrough of Scott’s new “Keep or Sell Your Home” worksheet Two realistic examples of when to sell your home or keep it as a rental property The numbers you need to make a rock-solid decision on your investment property The crucial question you should ask before keeping or selling your home How ONE decision can impact your future by hundreds of thousands of dollars (or more!) And So Much More! Links from the Show Mindy on BiggerPockets Scott on BiggerPockets Listen to All Your Favorite BiggerPockets Podcasts in One Place Join BiggerPockets for FREE Email Mindy: [email protected] Email Scott: [email protected] BiggerPockets Money Facebook Group Put Your Vacation Rental on Autopilot with Hospitable Buy the Book “Real Estate by the Numbers” Find an Investor-Friendly Agent in Your Area Download the “Keep or Sell Your Home” Worksheet Millions of Americans Should Keep Their Homes as Rentals, Not Sell. Here’s Why (00:00) Intro (05:11) Using the Worksheet (12:15) How Much Would You Make? (14:36) Breaking Down Your Options (20:08) Keep or Sell This Property? (29:11) The “BiggerPockets” Homeowner (34:54) Try the Worksheet! Check out more resources from this show on BiggerPockets.com and https://www.biggerpockets.com/blog/money-571 Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email [email protected] Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	Interest rates were at all time lows and then they jumped and they jumped and they jumped.
0:05.7	If you were lucky enough to lock in a sub three or four percent interest rate,
0:11.6	you definitely don't want to let it go. But that doesn't mean
0:15.2	that your house is always going to continue to work for you. Q the I'll just
0:21.0	turn it into a rental mindset. Today Scott and I are going to run through
0:26.0	his epic spreadsheet so you can do the math to see if it's truly a good idea to hold
0:32.4	on to that property and that interest rate.
0:35.2	Hello, hello, hello, and welcome to the BiggerPockets Money Podcast.
0:38.4	My name is Mindy Jensen and with me as always is my huge spreadsheet nerd co-host Scott Trutch.
0:44.7	It's many great to be here with you. You always excel at these types of introductions.
0:48.6	I'm looking forward to really nerding out today. This is going to be a little bit different of an episode. I know that many of you are going to be listening to this on a podcast. We will try to make it as helpful as possible, but this might be one that you might want to come back and rewatch on YouTube because the problem that we're
1:04.5	solving just has to be addressed in great detail with a large number of
1:09.1	calculations which are done in a spreadsheet. So I'm going to be sharing a
1:12.2	spreadsheet. This is available on bigger pockets.com,
1:16.8	hover over analyze deals in our navigation bar, and then go to the cell versus keep link there and you're able to find the spreadsheet.
1:24.3	And with that, let's get into it and I'll kind of share my screen and preview what I'm trying
1:29.1	to solve for here.
1:30.1	So, and the way I'll do that is I'll actually start with a quick story about the last couple of years
1:35.3	So let's set the scene here we've got I'll call this person lovingly average Joe this is a use case I like to start with in a lot of analyses, right? This is the median American home buyer.
1:46.0	The year is 2019 and are perfectly average or more specifically median American home buyer, this average Joe, bought his first home.
1:55.2	Joe bought this for $258,000, which yes was actually the median home price in 2019.
2:08.6	He uses an FHA mortgage and puts 5% down. And what happens next is crazy, right? So over the next several years the market explodes and by September of
	...

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