1. Risk vs. Reward: Set Aside Emotion and Focus on Logic

My wife and I are kicking around the idea of selling our beautiful 3-year-old home and moving our family into a rental property. Here are the reasons why...

Things aren't always as they seem

In June of 2018 we got the keys and were officially homeowners for the first time in our lives. I remember feeling skeptical during the entire home buying experience, thinking it was too good to be true. It was unimaginable that our first home would be new construction. The 2000 square foot tract-built home was a masterpiece in our eyes, almost twice the size of the rental house we had left behind. There was more space for storage than we knew what to do with, although that quickly changed once baby Taylor came along and infiltrated our roomy abode with truckloads of infant gadgets and accessories.

After the first year of home ownership, the glam of a brand new home had faded and we were beginning to notice the drawbacks of a tract/spec home: low quality of finish work, builder grade flooring/cabinets/fixtures, floor creaks from improper methods of construction, lack of customization, and the almost non-existent outdoor living space. For the past 3 years we've invested heaps of sweat equity and disposable income trying to make this property fit our needs.

Summer 2018: east fence and lawn

Spring/Summer/Fall 2019: hot tub install, dog kennel turf, and patio build

Spring & Summer 2020: west fence, retaining wall, paver patio, and yard do-over

Our "builder-grade-to-custom-made" projects have resulted in an amazing transformation of our home. However, we have come to accept that this home will never be exactly what we want or need for our growing family. With another baby due in December 2021, a larger floorplan is a must!

I've also considered the possibility of an addition but we've already pumped about $50,000 worth of materials into this property and I can't foresee the ROI in future expansion or upgrades. In its current state, the home is probably at its peak valuation for the location, size, and features.

Moonlighting

In 2017, I converted 600 sq. ft. of my parent's old horse barn into heated shop space. I needed somewhere to work on various projects for my side businesses (which I now have 3 of). The space has been incredibly useful and I've been blessed with amazing parents who have always encouraged me to follow my passion. The problem is that with a growing family and kids who need their daddy, how I spend my time is becoming more and more important. The 80 minute round-trip drive time to my parent's property has made me re-think the need to have a workshop within walking distance.

HOT Housing Market

Another reason that it might be time to pull the trigger is the fact that we are in a sellers market. Based on recent home sales in the area, I have full confidence that we could get top dollar and sell quickly. Our neighbors sold their home within 7 days of listing for $120,000 more than they paid for it 2.5 years prior. And with zero upgrades! If we can obtain our target asking price, the annualized ROI for this property will be around 16% and leave us with a large chunk of cash to leverage into our next real estate adventure.

Homeowners to Renters?

Seems kind of silly, I know. However, I mentioned before that it was a sellers market... Prices are sky high and inventory is still very low. It would be impossible to check all of the "must-have-feature" boxes, pay a reasonable price, not get out-bid by another eager buyer, align our home sale timing with the purchase of a new home, AND juggle the paperwork/transition between 2 mortgages! Also, did I mention that my wife was pregnant? That is a few too many variables that we have no control over.

Go Big or Go Home

I've completed many large, complicated projects, but this next one is really going to test me. Does anyone have a link to home building for dummies?