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Taking out a home equity loan to use as a deposit on a 2nd home, then selling the 2nd home when down the road when it's a sellers market. Is this an investment worth making?

Financially, we can swing it (if we cut down on the extras.) But is becoming a landlord a lot of work? What if we can't rent it for a while?

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Anonymous

Asked by Anonymous at 10:07 AM on Jul. 12, 2008 in Money & Work

Answers (5)
  • Honestly I would not. Not right now the economy is crazy right now it's up it's down ! IF you can swing it and have to cut back on the extras I would not chance it. Especially with gas, utilities, and food going up who knows what else may rise.

    But if you choose to go forth with your plab I hope it goes well
    Good Luck & Best Wishes
    Brooke
    maddysmommy907

    Answer by maddysmommy907 at 10:12 AM on Jul. 12, 2008

  • no not in todays market you will be out time and money and most likely get less then it is worth.
    misskitty98310

    Answer by misskitty98310 at 10:35 AM on Jul. 12, 2008

  • What if you find yourself in a predicament where you CAN'T swing it? One of you could lose a job or get hurt or something. You are putting a second home against the home that you LIVE in...I understand that it is just the deposit, but its still going to be a substantial amount of money. You could lose the home you live in if things don't go right. If you insist on doing this, then get a totally separate loan that is not tied to your home.
    slw123

    Answer by slw123 at 3:22 PM on Jul. 12, 2008

  • I would not potentially sacrifice my home for an investment that may not even work out. If you have to cut back on extras as you say to do it, then honestly you probably cannot afford it. My husband and I agreed that we would never ever borrow against our home. Not even for improvements to the home.
    AKEllen

    Answer by AKEllen at 5:07 PM on Jul. 12, 2008

  • My neighbors did that and now they are landlords with all the grief included. You will still be responsible for the upkeep, insurance and you have to make sure that you have a solid contract that covers you for liabilities etc. We took out a home equity loan to help pay for some bills to "better" our situation and now we just have one more bill to pay. Also, with the housing market as it is, who knows when thins will turn around? I know of a house that was custom built and they dropped the price $70K and still nothing.
    WellCoach

    Answer by WellCoach at 6:50 PM on Jul. 12, 2008

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