Q.
We recently bought a condo, and it has already appreciated about $50,000. Should we sell, or rent it out and try to save enough for another down payment?
A.
Personally, I wouldn’t advise spreading yourselves so thin at this point in your lives. A move to a bigger house generally means you’re starting a family, and as the mother of two kids, I can assure you that they will add a whole lot of unanticipated expenses.
More to consider:
- The question I think you're not asking yourselves (and need to) is how you’d feel about becoming landlords. If you were to hang on to the condo and rent it out, you’d add an additional level of responsibility to your lives when it's already on its way to becoming more complicated. Do you really want to answer middle-of-the-night calls from tenants complaining that the toilet is overflowing (again) or that the neighbor’s dog won’t stop barking?
- Finally, particularly in this market, don’t bank on more appreciation for your condo. The chairman of the Federal Reserve has already commented that he thinks this housing boom is over. So I’d err on the side of caution. Give yourselves plenty of time to sell your condo before you buy that bigger house. I’ve heard many horror stories from people who bought first and then found themselves unable to sell quickly. Carrying two mortgages (particularly when you weren’t planning on it) is no fun at all.
Nestpert: Jean Chatzky, a money coach, the financial editor for the Today show, and the author of five books
See More: Money Q&A , Buying a Home