The moving process can become overwhelming due to the number of items on your move-out checklist. Don’t allow this potentially stressful time to stop you from accumulating the most wealth for you and your family. As a homeowner who’s planning to move in the near future, you can implement the following pieces of advice to build wealth while moving.
Convert your current home into a rental property
If you’re considering moving, it’s understandable that you’d plan to sell your current home. However, it’s worthwhile to consider holding onto your current home and converting it into a rental property. This can become the best long-term investment you will ever make. You may be able to leverage the equity in your current home to make the new down payment through a cash-out refinance.
Make a smaller down payment on your new home
Regardless of whether you decide to hold onto your current home and turn it into a rental property or if you think it’s best to sell, deciding how much your new down payment should be is another major financial decision you’ll need to make. Typically, homeowners make large down payments with the proceeds from their previous home sale. With mortgage interest rates continuing to linger around all-time lows, a better way to build wealth while moving could be making a minimum down payment and investing somewhere you can yield higher returns.
Other factors to consider when deciding your new neighborhood
Downsizing the number of cars you own can save more money than you may realize. According to Move.org, Americans spend an average of $438.71 per month on their vehicle. If you move to an area where you can manage with one less vehicle, the funds you’ll be saving can be reallocated to your mortgage payment or other investments.
Another important factor that often gets overlooked when searching the market is the property value growth and taxes in the neighborhoods you’re wanting to settle into. If home values have risen quickly in the past decade for a specific neighborhood you’re interested in, it could turn out to be a beneficial long-term investment. If there’s not a noticeable difference between the neighborhoods you’re considering, compare the real estate taxes and confirm whether a specific neighborhood offers notably more savings. If you're interested in learning more, please reach out to discuss your options.