I was was going over my budget, and wanted to get some advice on whether or not I'm currently taking on too much risk.
I currently have 2 rental properties plus my primary residence, all 3 bought less than 4 years ago.
My question is whether or not I should sell one of the rentals in order to lower my risk and increase my cash position. I would prefer to avoid selling if possible
Profile
Male 32 years old with stay at home wife and 1 year old baby.
Wife currently has no plans on going back to work.
Income: $150k / year working in the IT industry. Currently self employed (LLC) with the same client for the past 2 years. Income can easily be replaced if I were to loose the client.
Cash: 40k in savings account. (+20k from the wife's savings)
Other invested assets (mutual funds): 90k
Primary residence:
Mortgage: $395k, market value: 550k
Rental property 1:
Mortgage, 298k, market value: 525k
cash flow: -$100/month
Rental property 2:
Mortgage, 178k, market value: 330k
cash flow: -$400/month
Unfortunately, I'm loosing money on the 2 rental properties every month primarily because of the increase in interest rates.
However, they're both very well situated and have appreciated in value since I bought them.
What concerns me is that after having paid all my expenses, (car payment, mortgage, food, rental deficit, etc.) I'm only left with about $1700 per month that I can put towards savings. I don't want to put my family at risk if a bad luck were to happen, such as a job loss. I also don't want to miss out on the potential future value appreciation of the rentals if I were to sell
Having said all that, would it be best to sell any of the rentals, or continue to hold on as I've been doing ?
I currently have 2 rental properties plus my primary residence, all 3 bought less than 4 years ago.
My question is whether or not I should sell one of the rentals in order to lower my risk and increase my cash position. I would prefer to avoid selling if possible
Profile
Male 32 years old with stay at home wife and 1 year old baby.
Wife currently has no plans on going back to work.
Income: $150k / year working in the IT industry. Currently self employed (LLC) with the same client for the past 2 years. Income can easily be replaced if I were to loose the client.
Cash: 40k in savings account. (+20k from the wife's savings)
Other invested assets (mutual funds): 90k
Primary residence:
Mortgage: $395k, market value: 550k
Rental property 1:
Mortgage, 298k, market value: 525k
cash flow: -$100/month
Rental property 2:
Mortgage, 178k, market value: 330k
cash flow: -$400/month
Unfortunately, I'm loosing money on the 2 rental properties every month primarily because of the increase in interest rates.
However, they're both very well situated and have appreciated in value since I bought them.
What concerns me is that after having paid all my expenses, (car payment, mortgage, food, rental deficit, etc.) I'm only left with about $1700 per month that I can put towards savings. I don't want to put my family at risk if a bad luck were to happen, such as a job loss. I also don't want to miss out on the potential future value appreciation of the rentals if I were to sell
Having said all that, would it be best to sell any of the rentals, or continue to hold on as I've been doing ?
Statistics: Posted by hervens — Sun Jun 09, 2024 4:03 pm — Replies 9 — Views 591