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Did some math to think about renting out our townhouse when we decide to take a break from work to live abroad for a bit.
Rental Income $4,500
Property Manager 450
Mortgage 4600
PMI 125
Property Tax 730
Mello Roos Tax 230
Community HOA 220
Neighborhood HOA 300
Home Maintenance Estimate 300
Homeowners Insurance 35
Umbrella Insurance 15
Total $7000
So I’m estimating having to pay about $2,500 a month for us to keep it. And prior to renting it out probably we’ll need to get a new HVAC ($12k) and garage door system ($1k).
840k x .04 = +$33.7k a year on capital appreciation
If the house value grows at 4% a year I think the math works out for us to keep it. Historically stuff has grown much faster than that but seems like that’s all changed nowadays unfortunately. We just got into the house 1 year ago so selling it seems like a bad idea given how much closing and realtor costs are. Seems better to hold onto it for a few years and hope some magic moment happens of int rates going down and valuations going up significantly. The area is really good. No additional housing can be built and schools are all rated 9s so renting out is easy.
Rental Income $4,500
Property Manager 450
Mortgage 4600
PMI 125
Property Tax 730
Mello Roos Tax 230
Community HOA 220
Neighborhood HOA 300
Home Maintenance Estimate 300
Homeowners Insurance 35
Umbrella Insurance 15
Total $7000
So I’m estimating having to pay about $2,500 a month for us to keep it. And prior to renting it out probably we’ll need to get a new HVAC ($12k) and garage door system ($1k).
840k x .04 = +$33.7k a year on capital appreciation
If the house value grows at 4% a year I think the math works out for us to keep it. Historically stuff has grown much faster than that but seems like that’s all changed nowadays unfortunately. We just got into the house 1 year ago so selling it seems like a bad idea given how much closing and realtor costs are. Seems better to hold onto it for a few years and hope some magic moment happens of int rates going down and valuations going up significantly. The area is really good. No additional housing can be built and schools are all rated 9s so renting out is easy.
- 6,719
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Strict numbers wise with no emotion involved.
I’d dump it. Cash flow isn’t there.
I’d dump it. Cash flow isn’t there.
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- Oct 28, 2013
- 3,478
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Was able to get our PMI off right at the two year mark. 30 year conventional at 2.875 with no pmi
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- Jul 31, 2012
Was it automatic or did you have to call? No refinancing required right?Was able to get our PMI off right at the two year mark. 30 year conventional at 2.875 with no pmi
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I just hit the online chat on my app and requested it. Was removed within minutes.
(Wells Fargo)
(Wells Fargo)
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- Aug 25, 2012
In our case we had to do it right after the two year mark. An appraiser came out after we contacted our lender. Took pictures inside and outside and wrote us three days later saying we got approved to get it removed.
Nereyda Vuelve Por Dios
formerly DONRE
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- Jul 22, 2012
Is this without having to pay anything? Tge value to my home on this eproperty website has it at 15% increase. And thats without an actual inspection of about 25k in upgrades.
s0lefunk
Supporter
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- May 31, 2007
We contacted our lender to have PMI removed less than 2 years into the mortgage. We had to fill out a form and pay $150 for the appraisal fee. They send an appraiser out, took a couple pics and asked about any upgrades we made since buying, and then were done. Simple and easy.
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Paid about 159 for the appraisal
- 33,909
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- Jul 13, 2005
Im a bit confused.
You guys are putting under 20% down, paying PMI, then getting that PMI removed within 1-2 years?
You guys are putting under 20% down, paying PMI, then getting that PMI removed within 1-2 years?
sneakaprince
Supporter
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- Joined
- Apr 29, 2007
Pandemic bump in appreciation/ equity.
- 33,909
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- Jul 13, 2005
If the value of your home goes up (due to market/renovations/etc) since purchase, or in this case < 2 years, PMI can be waived indefinitely?
Damn if that's the case I'm about to start doing 3-5% down payments + renovation flips instead of a 20% downpayment
sneakaprince
Supporter
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- Joined
- Apr 29, 2007
Definitely can do that fam. Once your under your 20% of appraised value whether that be from forced or natural appreciation you can get it removed.If the value of your home goes up (due to market/renovations/etc) since purchase, or in this case < 2 years, PMI can be waived indefinitely?
Damn if that's the case I'm about to start doing 3-5% down payments + renovation flips instead of a 20% downpayment
From my understanding this has always been the case. You could also accomplish this with a simple refinance but today's rates obviously aren't the rates of 2020 and 2021 so you gotta be smart.
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- Jul 13, 2005
Appreciate the insight. Always dreaded PMI so never considered a < 20% downpayment before.
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- Nov 5, 2012
Welp- just figured out I can probably get mine off now due to this
Thanks to the person who brought it up first, gonna look into this immediately
I pay $100 a month, it’ll be 2 years in august
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- Aug 25, 2012
No problem…if it gets off, you can continue to pay the same amount as you’re currently paying and put that extra towards principle
- 79,267
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- Nov 5, 2012
I just seen we have the same exact loan terms lol well at least the interest
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- Feb 23, 2006
I could be wrong, but I think FHA
I think FHA and USDA are the ones folks usually get pissed about. The FHA is for the life of the loan if you put down < 10%. USDAs charge an annual "guarantee fee" to my understanding. You should be good if you're just doing conventional or VA
sneakaprince
Supporter
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- Apr 29, 2007
This is a good point that I didn't take into consideration when I posted earlier. I've been lucky enough to get 5% down payments (non FHA) on a couple of deals. I forget about those FHA restrictions.
For people locked in at lower rates with FHA removing PMI could be a pain point. It's definitely worth examining where your loan stands a d what you would save.
