Submitted by me_irl_irl_irl_irl t3_117i56h in personalfinance
My wife and I bought a home at around 190k five years ago and can now sell for 290k. We took some of this equity in the form of a HELOC to get into our new home (dream home came on market and we are having a kid and needed to upgrade). Unfortunately we now have one of these garbage 7% rates on the new home, but that's beside the point.
Our old home would rent for around $2k a month. The mortgage is ~$1100 and the HELOC payment pumps that up closer to $1800.
We have offers and can just wipe out the HELOC immediately by selling and just be happy in our new home. But it also seems like we'd do a little bit better than breaking even (probably just breaking even assuming unexpected rental expenses) while dumping money straight into our own equity by renting it out.
The house is 8 minutes away from our new home and in a growing area.