I currently own my own home, but recently inherited property and I have the opportunity to sell my current home and use the equity to put a house on the new property.
Within this opportunity I have two options. I can use all of the equity from the sale of my current house to build a new house on the property, which means I will have no mortgage payment (but I may not have the space I need for my family) or I can build the house of my dreams but I will end up financing a small balance. Either of these options would be very beneficial to my current expense and debt problems.
Here are the catches: The property I inherited is in a much lower income community than me and my family are used to (I am concerned about raising my kids there). The property has been in my family for quite some time and my family would not appreciate it if later down the road I decide to sell it (so what ever decision I make will be permanent).
What would you do and why? And additional suggestions are welcome.
2006-08-17 06:17:37 · 5 answers · asked by Anonymous in Business & Finance ➔ Personal Finance
Build a moderate home within the parameters of the current, or anticipated socioeconomic status of the neighborhood.
Then, rent the place for a second source of income.
2006-08-17 06:44:46 · answer #1 · answered by Anonymous · 0⤊ 0⤋
First three rules of Real Estate...
Rule no. 1: Location
Rule no. 2: Location
Rule no. 3: Location
The reality is that if the property has sentimental value to others (not you) and is in an area you would not raise your kids in, then your only viable option is to sell it and put the proceeds toward your dream house in your dream location.
I doubt you personally caused the area your family's property is on to fall into decline. If other members of your family want to hold onto the property, you should offer to let them buy it first before you put it onto the open market.
On the other hand, if your "debt problems" are significant enough, your best bet may be to sell the property (to family or others), and NOT build a new house. Use the money to get out of debt first and keep the rest for a college fund for your kids.
Good luck...
2006-08-17 13:29:28 · answer #2 · answered by i1patrick 2 · 0⤊ 0⤋
Why would you go down the social ladder and how are the schools in the poorer area ? Transportation and what about crime too ? Never build the nicest house in a neighborhood cause all you are doing is bringing up other house values while yours stays the same or actually decreases. Sell your house and the property and build a sweet home in suburbia or the country where land is cheap .
2006-08-17 15:02:55 · answer #3 · answered by Anonymous · 0⤊ 0⤋
You would need to look at the long term picture for that property. Are developers starting to revitalize that neighborhood? If not, then I wouldn't build on it. If it is vacant, the taxes should not be too heavy. If your income is sufficient, then send your kids to private school if you really want to build. Keep in mind, it can take 6 months for you to build your dream home. If you sell you home to build, where will you live till your home is built?
2006-08-17 13:25:09 · answer #4 · answered by Richard B 3 · 0⤊ 0⤋
You could use the property itself as collateral for a loan to build your dreamhouse. As soon as your dream house is built you can then rent your old house and use that income to pay off the mortgage for the house of your dreams.
2006-08-17 13:24:48 · answer #5 · answered by Joker 7 · 0⤊ 0⤋