I have a rental property right now in Southern California worth about $550-600K. It is fully paid off. I can almost consider that to be liquid since I could probably sell it in less than a week with the SoCal real estate market the way it is. I'm currently getting $2600/month rent from it, but with the high HOA and taxes/Mello Roos, the total return comes out to be only 3-4%.
I'm considering selling it and putting the money somewhere else, but outside of real estate, I'm not too familiar with what's out there. I don't really want to put it somewhere where it is locked for too many years.
For background info:
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I have a home I live in with a 3.2% mortgage rate. I have $350K equity in it currently (bought for $450K and now worth $650K).
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Own two cars paid off
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Married with no kids
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Both wife and I have safe jobs making good money
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Plenty of emergency fund.
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Have Roth IRA and 401K (company doesn't match booo)
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I'm closing on a new home in about 2 months after mine sells, but I don't need extra funds as I will use the equity and a little extra cash to put a large down payment in.
Any ideas where to put this extra $550-600K? Leave it where it is and get $2600/month? Yes there are tax deductions there which get me more than that 3-4% return, but it isn't a ton. I'm guessing I net about $16-18K/annually from that home with an initial purchase price of $540K. I had it rented immediately after purchase and I had the same tenant in there for the past 2 years.
Put it in another rental property? As many of you know, prices are very high in my area and you can't really MAKE money on rentals here. I don't have the time to flip/buy distressed homes either. I know I could buy in other states, but I don't feel comfortable having it too far from me since I manage it myself. I actually sold one in NJ to buy this one I have now so it is closer to me. I can drive over to replace a thermostat if needed (which I just did) vs. call a contractor and spend $500 for his time.
EDIT: I very much prefer to keep some type of cash flow coming in from wherever I put these funds. It certainly helps with lifestyle.
Thanks for your time!
Submitted January 04, 2017 at 11:36AM by GrumpyRedPanda http://ift.tt/2j9NlfN
