Upgrade house in short timeframe
Married with a kid. We bought a new $1M townhome in Seattle last summer, which turned out to not fit our lifestyle. We have parents who come to stay with us on occasion. We're looking to upgrade to a 4bd home in the suburbs around 1.5M. We thought we would stay at least 5 years in the townhome, but part of me worries that we won't be able to afford a home in the suburbs in 5 years. Is it too soon to move? I'm guessing we will take a 10% loss due to transaction fees if we sell the townhome after less than a year. We got a 6.3% interest rate, so it's unlikely we can fully cover the townhome mortgage at current rents. 550k household income
Use Redfin for 1% sellers agent commission, if available in your area and may be able to save a few grand
Which would cost more, taking the 10% loss or putting guests up at a nice hotel?
If OP is from India then putting up parents in hotel will not go well.
Oh well then they don’t have to come. Don’t accept emotional blackmail.
How big is the townhome? What neighborhood?
1600 sq ft 3 bd. Ballard. Guests stay in home office or kids room when they visit.
If you haven’t already and have the time, you can look into medium term rentals if it’s an option. Traveling nurses specifically. My MIL in Ballard gets rented back to back for quite a lot of money. I would guess $6K for a furnished 3 bed. However, there will be vacancies in between. Long term rental will prob be only get you 4.5K per month. You could also make a larger down payment to get rent cover your PITI but depends on your risk tolerance. If you decide to sell, rn in spring is a good time. Houses around me in north Ballard and are going way above list price with multiple offers. Sfh though
Let me know if you need a realtor. I will only take 1% fee.
Realistically you can only rent a 3bdroom th for like 3500-4000. Do you think your parents would have been ok if it were a 4 bd townhouse? I’m curious bc I might want to do the opposite to you.
3500-4K rent is what I had thought, which is why renting the place out may not make financial sense. A 4bd townhome may have been ok, but at that point you're getting to prices similar to a single family home. Why do you mean you want to do the opposite? Rent out your home and buy a townhome? I suppose you may be able to save some money if you don't need the space.
3 bed townhome in Ballard would rent for $4500, especially if it’s new
There's a reason why you always buy bigger than you think you'll need. 3000+ sq ft with 5+ bedrooms is a bare minimum (2 offices, 2 kids, guests sleep in the living room or something).
Yes, in retrospect this is likely what we should have done, but at the time I didn't want to be house poor given our income. It's a tough balance. I would have done that if interest rates had been lower.
I’d stay put 2 years so you can have the tax advantages and then rent it our
Only makes sense to wait if OP is making a profit after deducting Realtor fees
How can he take the tax advantage when renting out his townhouse?