Let’s say you bought your house two years ago with an incredible interest rate or you refinanced when interest rates were at an all-time low. But your family is growing and you want to make a move. Do you feel stuck? What if there was another option? Have you thought of converting your primary residence into an investment property?
This is an option that people forget to look at when they are looking to move up. Instead of building wealth and becoming an investor, they look into selling their home and getting the down payment from the proceeds. Another option is pulling the down payment as a second loan from your primary residence. Anytime you purchase a primary residence, you only need 5-20% down, depending on whether you want to pay PMI or not. PMI is based on your credit score and the loan-to-value ratio, and this could be relatively low, so many times I advise people to not put the full 20% down.
If you took advantage of the low-interest rates, this definitely could mean positive cash flow for you on your new rental, which will help make up the difference in your higher payment on your new property. Now, this may not be for everyone, but it is definitely an option. If this sounds like something you would be interested in now or in the next year or two, Book a consultation with me so we can come up with a plan for you.