A very “good” problem many investors have is whether they should sell or rent their primary residence when it comes time to move out. I have been blessed with this problem over the last two months, and jumped back and forth as to what I think the best option is and ultimately decided to rent my primary residence.
Let me briefly set the scene here. Brian Carberry, editorial director at BiggerPockets, and I were in extremely similar circumstances over the last two months: making a tough decision about whether to sell or rent our primary residences after moving out. Brian decided to sell his property, and I decided to turn my home into a traditional long-term rental property.
Every investor is unique in the way that they invest in real estate. They have unique goals, unique variables in their local markets, unique personal financial circumstances, and so much more that ultimately factor into the decisions we make. Brian is not an idiot, though it may seem like he is for selling his primary residence, which could have been very easily converted into a cash-flowing long-term rental property. I would never try to make anyone feel bad about their decision, but I know Brian has very thick skin after years and years of supporting Philadelphia sports teams.
The Holes in Brian’s Logic
Brian is one of the smartest individuals I have come across in my professional career, but on this one, he took the easy way out instead of trying to maximize the opportunity that presented itself.
The equity position and cash flow present too much opportunity to sell. I have a 3% loan on my first investment property, and trust me, it is almost impossible to think of refinancing or selling at a rate well below the historic average for 30-year mortgages. A common phrase I live by is “you make your money when you buy.” Brian hit an absolute home run out of the park when buying his home in 2020 but only decided to take a ground-rule…