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How do you decide to upgrade to a bigger home or buy a small investment home to rent out?

Our house is paid off. My husband wants to buy a house near his work to rent out until our children have graduated high school in about 10 years. I would like to upgrade to a slightly larger home (about $100k more than what ours is worth). We have great credit scores and over $130k in reliable income.
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July 14 2012 - US
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Answers (8)

Best Answer
No one can tell you how to live.

Your husband's idea is great. Buying investment property is a life-changing endeavor (ahem... usually for the better). But the market is generally soft, nationwide, rates are ridiculously low, and there are plenty of good deals to be had.

Will you need the proceeds from the sale of your current home to buy a larger one? If not, why not rent out the home you're in now and go get yourself the larger home you want?
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July 17 2012
It would be difficult to say much about your home's value or potential to appreciate without any knowledge of the area or recent sales.

But, appreciation is less of a concern when you're making money every month, right?

Find a local real estate professional you can trust. Don't be afraid to interview a few. Make sure they understand what your goals are. The wrong Realtor is a glorified taxi driver and doorman. But the right realtor will be a wealth of knowledge and experience and be an asset to you. Find the right Realtor. ;)
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July 17 2012
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Thank you. You understand what I'm saying. We are thinking about renting our current home and purchasing the larger home to live in. We're crunching the #'s now. 

The other thing about our current home is that it's a 1970's split foyer with no foyer space. Drives us crazy! And I'm thinking that it won't appreciate very well because of it's age and type. Any thoughts?
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July 17 2012
Profile picture for wetdawgs
Yes, I would take your husband's approach.  

More space does not make for more social activity.  If you wish for your kids to have more social activity, bake some cookies and invite some of their friends over.  (Or, if the weather is hot make some popsicles).     I agree with SoCalEngr on this one.  

What is getting in the way of inviting kids' friends today?  It is amazing how long kids can be entertained in a few square feet of space, or going to the zoo, or park or ???



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July 15 2012
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"I'm thinking it could be a good investment socially for us in the kids because we would be more likely to invite guests over than we are now."

No, you won't. You either are or are not social people. Reading between the lines, what you're really saying is "I'd be more willing to invite people if I didn't have to be embarrassed about our lack of room". There's always enough room, but it's not about the house. Been there, done that, got the t-shirt.

Your husband's approach is the more reasoned.
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July 15 2012
Profile picture for user9339399
Thank you for your answers. So are you both saying that buying a more expensive home isn't the best money-wise investment for the future? I'm thinking it could be a good investment socially for us in the kids because we would be more likely to invite guests over than we are now.
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July 15 2012
Not unlike wetdawgs  I also know what I would do, now is up to you to find out what to do.  There is not a wrong or right decision only the one that you both agree on.  You both independently should like a list with the pros and cons to both ideas and then  sit down and discuss them. Good luck!
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July 14 2012
Profile picture for wetdawgs
There are pros and cons to both choices, but the bottom line is the two of you agreeing on priorities.

One approach is investing for the future, the other is living more comfortably for the next few years and not investing for the future.     I know what my personal decision would be, but I'm not a member of your partnership so have no say in the matter!



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July 14 2012
 
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