So a question I've heard a lot recently is "should I turn my home into a rental property and buy my next home?" The answer is it depends. It depends on what price point, how much you owe on your home, and the equity you have in it.
Let's say you own a home under $350,000 in the Chattanooga marketplace. There is a good chance that it could be a prime opportunity for a rental property because of its affordability.
The other question you've got to ask is "how much equity do I have in my home?" If you have enough equity in your home to sell it and turn it into two down-payments, then I am going to challenge you to sell your home.
Let's do the math
$350,000 x 1.05 = $367,500 | In one year of a 5% gain, you made $17,500. If we do this 5 times, you will have gained nearly $100,000 in 5 five years.
If you sell that home and use the money you have gained in equity to buy two homes around the same price, that number is going to double.
Bottom line
It really depends! You should talk to us and we'll help you through it!
