We’ve all been talking and hearing about the ongoing lack of inventory in the housing market, so we won’t rehash what we already know.
For those of you who are unfamiliar with what’s going on, please visit our YouTube Channel, where you can watch our videos on this topic: YouTube Channel Link
There are so many homeowners finding themselves wearing “golden handcuffs,” where the restraints are the sub 4% interest rates, especially those with rates in the 2% and 3% range.
What we know is that there are many homeowners who would like to make a move but feel trapped by their current circumstances. Transitioning from a 3% interest rate to a 7% interest rate would be difficult enough, but rising home values are really compounding the issue.
However, there are some options to consider for those in this predicament. One of the most potent ways to build wealth as a homeowner is through owning income properties. In other words, to become a landlord.
If you have a mortgage under 4%, there’s a good chance that your mortgage payment is lower than what you could collect in rent. By converting your primary residence into a rental property, you can retain your existing mortgage, allowing you to generate cash flow while someone else pays off your mortgage.
Of course, this decision requires you to move out of your current home, which would likely mean purchasing another property or maybe renting one.
If you meet the criteria to purchase your next home without selling your current one, this is a great opportunity. But, of course, it’s important to make sure that you’re comfortable with the financial aspects, but if you can manage it, it’s one of the most effective ways to accumulate wealth.
Here are a few ways you can explore this possibility:
1. Begin by determining the potential rental income for your property. If you’re uncertain, ask us for a “Rental Analysis.”
2. Utilize a mortgage calculator to identify your comfort zone for a new home purchase without selling your current property.
3. Search for homes within that comfort zone range. If you find something appealing, you can call us to schedule a tour.
The smart thing would be to explore these options to see if they would even work for you. The worst-case scenario would be that the numbers don’t work out. But, in that case, you’ll simply remain in your current situation.
To make this even easier, don’t hesitate to reach out to us for assistance in crunching the numbers and exploring various scenarios.
P.S. If you’re contemplating a move and need to sell your current home, feel free to inquire about the available options that could potentially assist you in this process.
