Afford Anything

Tag: sell or rent out

By Paula Pant

#312: Ask Paula – How Should I Invest $5,000 Per Month?

After paying basic living expenses and maxing out their 401k’s and Roth IRAs, Caroline and her partner have $4,000 – $5,000 left each month. Where should they put this money if their goal is to simply have their money work harder for them?

Sanjay is torn between selling his townhome or renting it out. The rental numbers don’t work on his 15-year mortgage — should he refinance to a 30-year mortgage instead?

“Olivia” has two unrelated questions: what are our thoughts on the housing market in relation to the moratoriums on mortgage payments and emergency bans on evictions? What will happen when they go away? Additionally, what tools, questions, or resources do we recommend to have a productive financial conversation with your partner?

Kyle wants to construct a portfolio with the highest Sharpe ratios and wants to know: would the risk parity model work? What are the downsides?

“Priyanka” wants to know: do you need to submit receipts for the HSA contributions you make?

G is curious: does the stimulus check received for their children count as earned income for the kids? If so, can they put it toward the Roth IRAs they opened for their children?

My friend and former financial planner, Joe Saul-Sehy, joins me as usual to tackle these questions. Enjoy!

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By Paula Pant

#308: Ask Paula – I Want to Travel After I Retire; How Much Should I Save?

Anonymous in Virginia wants to travel after retiring, which will increase her expenses for the first seven or so years of her retirement. How can she plan for a higher withdrawal rate at the beginning of retirement, and a lower withdrawal rate in the middle of her retirement?

Given the talk around student loan forgiveness, Jess wants to know: should she pay the minimum on her student loan debt and save the payments she would otherwise make? Or should she keep throwing extra at her higher interest loans?

Ziggy purchased an $890,000 property in San Mateo, CA in 2016. After living there for a year, he had to move, so he rented it out. Unfortunately, it’s cash flow negative. Is this property worth holding onto, or should he sell?

Vivek has a paid-off primary residence that he’s interested in renting out for a few years, before selling. He’s worried about capital gains tax – does turning the home into a rental impact the amount he’ll pay?

My friend and former financial planner, Joe Saul-Sehy, joins me to answer these questions on today’s show. Let’s dive in!

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By Paula Pant

#266: Ask Paula – Your Real Estate Questions, Answered

Ali is a travel nurse and wants to get into real estate investing. Should she buy a duplex that needs fixing up or a cheaper apartment that’s rent-ready?

Max is torn between investing in a rental property or taking advantage of a mega backdoor Roth 401k through his company. Which is the better option?

Paul’s parents own a property worth $100,000, and they owe $80,000 on the mortgage. If he wants to buy this property from them, how should he do it?

Kate and her husband own a townhome that has appreciated substantially, but they need a bigger house. They’re wondering: is it wise to keep it, rent it out, and use a cash-out refinance as a downpayment on their next property?

I answer these questions on today’s episode. Enjoy!

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By Paula Pant

#262: Ask Paula – I’m Taking a Mini-Retirement in a Pandemic. What Should I Do?

Tyson is taking a year off of work and plans to devote some of his time to domestic travel, volunteer work, and bolstering his rental property portfolio. He originally planned to travel internationally, but won’t due to the pandemic. How does this plan sound?

Jace is wondering whether she should take advantage of the low stock market prices or keep a larger emergency fund due to the pandemic. Which is the better option, given her goal of financial independence?

Jace also wants to know: where do you park your money after maxing out a 401k and Roth IRA?

Venkat had to relocate after living in a condo for one year. He rents out the condo, but he’s in the red. Should he sell this condo? If so, when? 

TW has $250,000 in cash that he can use to either pay off his rental property or purchase two more properties. Which is the better option? 

I answer these questions in today’s episode. Enjoy!

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By Paula Pant

#247: Ask Paula – Is the Stock Market Going to Crash in 2020? How Should I Invest in a Bear Market?

Caroline wants to buy her first home in Denver, CO. How can she calculate how much mortgage she can comfortably afford?

Anne plans to retire later this year on rental income (woohoo!). She’s saved up a hefty emergency fund for her properties, and she wants to know 1) if she should invest a portion of this in index funds, and 2) whether she should rebalance her portfolio to account for this huge cash allocation.

Anonymous Nurse has over $100,000 in debt, not including their mortgage. They want to invest in rental properties, but with so much debt, they’re thinking of selling their home or renting it out. Which option is best given their interest in real estate?

Joy wants to know if she should put $50,000 towards her primary residence mortgage, or use it as a downpayment on her first rental property. What are the pros and cons of each option?

Anonymous owns a cash-flow positive condo…on leased land. The land will revert back to the owners in 32 years. When is the best time to sell this property?

I answer these five questions in today’s episode. Enjoy!

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By Paula Pant

#239: Ask Paula – Should I Put My Student Loans in Forbearance? Should I Buy a Vacation Rental in the Mountains? and More

Lo is in a good spot with her career, but she’s struggling with a ton of student loan debt, and consequently, credit card debt. What should she do to manage it?

Anonymous wants to know how to set up a backdoor Roth IRA.

Eric and his wife own a property in Savannah, GA that brings in more money as an Airbnb than a traditional rental. They want to invest in more properties and are wondering if this model is the best path to take.

James wants to own a vacation rental in the Vermont mountains that he can use when it’s vacant. What features or qualities would make a profitable vacation rental? What red flags should be on his radar?

Ayesha is looking at buying a rental property that has a partial HUD claim on it. What kind of complications should she anticipate? Or should she let this property go completely?

Shelbi and her husband own a rental property that they purchased for $178,000 that’s now valued at $300,000. They’re looking at a multitude of options – sell it, move into it, or keep it. What’s best given their FIRE goal?

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By Paula Pant

#235: Ask Paula – Sooo … I Quit My Job. What Type of Business Should I Start?

Anna has made the leap to self-employment … but what’s next? She lives in the Bay Area and she’s trying to choose between five business ideas; she needs to make enough money to stay in her high-cost area.

Doug recently won $9,000 from an online poker side gig and is wondering how best to use the funds: pay off high-interest student loan debt, or keep it to increase his poker earning potential?

Alex and his partner want to househack a single-family property with a mother-in-law suit. What should they consider as far as zoning goes?

Darrell is on track to retire in two years at age 55 and wants to know what he should do with his primary residence. Should he rent it out? Or should he sell it and use the profit to invest in rental properties? Or use the profit to buy his retirement home?

Mara is curious about 1031 exchanges. She has equity in a rental property that she’d like to harvest, but she wants more information before making the move.

Michael and his wife are struggling with competing goals. They want to invest in real estate, but they also want to move into an apartment closer to work to reduce their long commutes. Should they sell their home and invest the equity into a rental property, or should they take a HELOC on their home instead?

I answer these six questions in today’s episode. Enjoy!

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By Paula Pant

#201: Ask Paula – Which House Should I Pay Off First?

Ross and his wife are both in the Navy. They bought a home while they were stationed in Hawaii. Then the Navy sent them to Virginia, where they currently live; they’ve purchased a home there, too. They kept the Hawaii home as a rental property, and they’d like to move back into it when they retire. Which home should they repay first?

Mike is 33, debt-free except for his mortgage, and earns more than $200,000 per year. He saves half of his income. What should he do with his savings? Pay off his mortgage? Invest?

Josh has a nervous habit of checking his investment account balances daily. How can he break this habit?

Amanda and her husband live in a duplex. They have $115,000 in equity in their home, and another $115,000 remaining on the mortgage. They’d like to move. Should they hold the duplex as a rental? Or should they sell and use the proceeds to buy a cheaper home, with a goal of being mortgage-free?

Christy wants to know how to compete with other aggressive real estate investors who are bidding on homes.

I answer these five questions in today’s episode. Enjoy!

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By Paula Pant

#170: Ask Paula – When Should I NOT Use the One Percent Rule for a Rental Property?

When should you NOT use the one percent rule for rental property investing? In today’s episode, I encourage two callers to violate the One Percent Rule for real estate that they already own.

WHAAATTTT? Why would I say that? Especially given that I’ve gained a bit of a reputation as The World’s Most Staunch Advocate of the One Percent Rule? (Long title, I know, but someone’s gotta wear it.)

And if you’re not going to use the One Percent Rule, how should you make decisions about your real estate investments instead?

Find out in this podcast episode. Enjoy!

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By Paula Pant

#165: Ask Paula – Should I Invest in Index Funds or Rental Properties?

Should Kim, an entrepreneur, invest in index funds or rental properties?

Should Nick, an MBA student, househack into a more-expensive home with stronger cash flow, or a cheaper home with more budgetary wiggle room?

Should Kelly, who is getting married soon, sell her current home and use the proceeds to buy multiple rentals? Or should she use her current home as a rental property?

Should Trayci and her sister invest in rental properties or bare land?

I answer these four questions in today’s episode.

We’re a weekly show, but on the first Friday of the month, we air a bonus episode. This is our December 2018 First Friday Bonus Episode.

Enjoy!

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Afford Anything