BiggerPockets Money Podcast - Which Path to Financial Independence Is Faster? Sell or Rent?

Episode Date: December 26, 2025

Should you turn your primary home into a rental property or sell it when you move? It's one of the biggest financial decisions homeowners face, and in this episode, Mindy Jensen and Scott Trench are helping Alyssa and John figure out the answer. This couple is relocating and facing a dilemma: they have a home with a low mortgage rate that could generate rental income, but they're also craving simplicity and wondering if selling would accelerate their path to financial independence. Alyssa and John open up about their complete financial picture, investment portfolio, and long-term FI goals as Scott and Mindy crunch the numbers and weigh the options. This Episode Covers: The financial pros and cons of converting your primary residence into a rental property How to analyze rental property cash flow and return on investment Tax implications of selling vs. renting out your home The impact of low mortgage rates on the rent vs. sell decision Lifestyle considerations: being a long-distance landlord and property management challenges How rental income affects your path to financial independence Real numbers breakdown: Alyssa and John's complete financial analysis Property management costs and whether DIY landlording is worth it How to make smarter real estate decisions during major life transitions And SO much more! Learn more about your ad choices. Visit megaphone.fm/adchoices

Today's guests are relocating and they're faced with a critical decision. Do we keep our primary residence with the super low mortgage and turn it into a rental or sell it and be done? Today, we're going to run the numbers to decide which one gets them to financial independence faster. Hello and welcome to the Bigger Pockets Money podcast. My name is Mindy Jensen and with me as always is my keeping his primary residence co-host, Scott Trench. Thanks, Mindy. Great to be here. Looking forward to chatting with Alison and Jan on the first finance Friday in a while.

We're so excited to be joined by these two today. Thank you so much for providing such a detailed breakout of your numbers in our new Finance Friday template and spotting an error in there. There's going to be a couple errors as we put out these new forms and stuff. So thank you for telling us about that calculation error and presenting your financials for us. Do you give us a little quick overview of how you got to where you are today and your background with money? I would say this all kind of started for us when we read Rich Dad, Poor Dad, like five, six years ago.

John's been investing a lot longer than I have, so he had to get me on board with it. And I read that book and it kind of a switch flipped for me. So I really got into it after that. Kind of started just by investing in actually my first investment was in real estate. That felt a little bit more manageable for me than going into stocks. So we bought an Airbnb property in Florida that same year I bought a second property. And then the year after that, I bought a third property. And then from there, I started to really get into it and see what investing could do.

So then I got into stocks between a few different IRAs, brokerage accounts, all of that. So it's been fun. Now we're kind of at the point that we like to gamify it and just see like what else we can do. We can take a few more risks with it. But it's been really fun. For me, it's been more of the slow and steady approach. You know, I went into the Marine Corps right out of college as an officer and financial advisors said, hey, invest in a Roth, the TSP and everything.

So I've just been doing, you know, automatic investments for the last two decades. and it's definitely paid off, you know, in the low-cost index funds. And, you know, so we, you know, we can go through our numbers as we go through it. But we're at a good point now. And, you know, we definitely have some some questions. We love the podcast, though. It's an honor to be on. Scott and Mindy, long-time listeners of Bigger Pockets, the main podcast and then Bigger Pockets money. So glad to be on with you both. Well, we're certainly happy to have you. Let's look at those numbers that you were so kind enough to share with us. I've got all of your numbers on our personal financial statement document, which you can find at biggerpocketsmoney.com

slash resources if you would like to get a more holistic view of your own personal finances, but we're going to look at John and Alyssa. So we've got gross taxable income of $290,000, which is awesome. Yay. This is John's pay, Alyssa's pay, John's military reserve pay, John's military disability pay, and rental income of $12,000 a year. expenses I'm seeing of $7,400 a month or $89,000 a year against that $289,000 in income, where are you putting all of that extra $200,000 that you're not spending every year?

Yeah. So just like kind of quick backstory on that. This is, I actually owned my own business for several years. I just kind of am giving that up now as we're looking to move out of the state. My income was a lot higher the past like five or six years. so we've had quite a bit of disposable income. I personally was investing probably 60% of like my take home into my stock portfolio. So John's the same.

Like we have a hard time spending money on things. So for us, I think that's one of the things we can talk about too. We just wanted like another set of eyes on our numbers to be like, you guys can live a little bit more than you are. Like I get a lot of joy out of watching my investment accounts grow. And I don't feel like we are not doing the things that we want to do. But I also feel like maybe we could be.

doing more than we are, if that makes sense. So to answer your question, like long story short, it's going into an investment accounts. Going over to your Assets and Liabilities tab, I am seeing a couple of cells that I am very curious about. So we have a total net worth of approximately $1.9 million, which is awesome. How old are you guys? I'm 36. 41. Okay, so that's a little bit better than me when I was at that stage. I think that's probably twice what I was at at your stage. So you're winning. Yay. Where that money is located is $400,000 in cash. So we're going to talk about that. So I have a very big cash position right now. I sold our Florida condo and I got back probably like $70,000 in cash. That was in September. And then I've had quite a bit of cash because we've been on the fence.

We know we want to move next year. And with interest rates where they are, we're trying to to decide whether we sell our house here in West Hartford, but we'd rent it at least for a year while we're down there and just test things out. But I've been keeping a lot of cash because if we want to keep this as a rental, I don't really want to take on like a 7% interest rate on a home. That's like $6 or $700,000. So I've been keeping a big cash position to buy down, like put more equity into the house and then maybe you only have to finance like $200,000 or $300,000. So I've been keeping a lot of cash on the side for that. So that's mostly, I'd say $100,000 of that's probably John's in 300K's mine.

We keep a lot of separate accounts. It just works for us. So that's mostly my cash. And I'm also like, I know it's a huge cash position. But I'm just like, I haven't been able to decide what to do about the house. So that's why I've been keeping it. Okay. So I will allow that because it's a huge cash position with thought behind it.

It's not just, I don't know what to do with it. So I'm just keeping it in cash. Yeah. And at least it's, it's in a high yield savings account. So I'm getting 4% on it. So at least it's doing something. It's not great, but it's something. Well, and if you're going to use it.

it to buy a house, sticking it in the stock market is the wrong move because the stock market is incredibly volatile right now, especially as we get towards the end of the year, but also just in general, stocks are up, stocks are down, huge amounts. So when you go to buy your house and stocks are down, that would really stink. Okay. So now that we've covered your cash, we have traditional accounts, IRAs 401Ks of 550. We have Roth accounts of 432, which is awesome. These are hundreds of thousands of dollars 550,000, $432,000. Other retirement accounts, HSA, $55,000. Awesome. Assuming that you have a, you're just cash flowing and keeping your receipts. That's fantastic. Total retirement accounts, just over a million dollars. After tax stock portfolio, $425,000, which means, Scott, they are not going

to fall victim to the middle class trap, which is fantastic. Crypto of $6,000, I'll allow it. I don't love it, but I'll allow it. Crypto golden commodities. Sorry, that could be. just gold. I have a little bit of gold, too. After-tax liquid investments total $4131,000. And your net liquid financial portfolio value is 1.4. But we also have an illiquid portfolio, $370,000 in investment real estate with debts of $178,000, so $191,000 in equity and estimated $12,000 a month in cash flow. Oh, that's per year. per year. Oh, no, it's like a thousand. Oh, so we'll talk about real estate too, $12,000 a year in real estate. Hmm. Well, let's look at those numbers in a bit. So you've got a primary residence of 575 with a mortgage of 153, 155. So you'll be at 419 with home equity. Vehicles are 48,000. Other is 15,000. And beneficiary and other accounts like 529s or DAFs is 12,000. For a grand total of 1.9. Well, you guys are doing okay. What on earth can Scott and I help you with?

This position is obviously really strong. You guys got to know you're doing great at the highest level from a financial standpoint here. But, you know, when I look at these numbers and I see $1.9 million in net worth, 1.5 in kind of these traditional investment accounts, and $200 in rental property equity with $12,000 in cash flow. It's got to feel like the portfolio is not doing much for you, even though it's a big number and growing. Is that at all how you feel about it to some extent? Yeah. Yeah, for some reason.

It's like, I know these are great numbers. And, you know, you always see, like, I follow a lot of financial people on Instagram and things. And you always see, like, what the average net worth is. And I know we're well above it. And we're not lavish spenders. We don't live a lavish lifestyle either. But it just, I don't know.

I feel like it's not as much as it looks like. I don't know how else to describe it, but I think you kind of hit the nail on the head that I'm like, yeah, it's a great portfolio, but it doesn't feel like we're there yet. I just want to make sure we're clear. we're clear that maybe we messed up that sell. The cash flow on real estate is about a thousand months, so 12,000 per year. If that was meant to be per month, yeah, that's not. That would have changed things drastically. Yeah, yeah. If I was making 12 grand a month in real estate, I think I would feel okay. 12 grand is meaningless in the context of $290,000 in household income, right? You've put in some numbers here.

I'm glad you put in the annoyance factors of one on one of the properties, but it's still, like, if you're earning, like this is an enormous household income. And that's so small today, it could be changes in the future. That's got to be kind of head scratching a little bit sometimes of, hey, why are we in this when it's such a tiny part of our portfolio? That's what we are really struggling with is where we live right now. We have a 2.5% interest rate on our primary home and it will be paid off in like six and a half years.

But we do want to move next year. I manage our properties. I don't love managing properties. I have like the personality that if an issue comes up, I literally cannot relax until it's handled. And I can't be like, oh, let me just call somebody and get it done. Like, it stresses me out and, like, it's all consuming for me when there's an issue. And I'm at the point, like, that's why I'm giving up my business. Like, we have a daughter who's three. And I'm kind of just at a point that I'm like, okay, I know we've done pretty well. I don't

have to like have the stress of running a business. I don't really need the stress of managing tenants anymore. I have a different job now that's like, doesn't ask a whole lot of me. It's pretty low stress. But I took a pay cup, but that was okay, given where we were. I want to work a little bit. Like I do enjoy like working, but I don't want a ton of stress with it. But we just like, I want to see numbers to see like, does it make a whole lot of sense or difference in our portfolio? If we keep this house, rent it for the foreseeable future and then use all of like our cash to buy a new home and finance the rest. And then basically like once we pay that off, we put money into the stock market or does it make more sense for us to sell our primary home, buy.

I completely, like, don't have a mortgage at all when we buy a new property next year, get rid of the stress of this house. And then we would take everything else that we would be making. And, like, we do have the discipline to put it into the stock market. Like, it's not like we'd go out and spend the difference. So I just really want to see, like, if one way or the other makes a drastic difference in our overall, like, net worth in the long term. And now, a quick word for our show sponsor.

Tax season is one of the only times all year when most people actually look at their full financial picture. including income, spending, savings, investments, the whole thing. And if you're like most folks, it can be a little eye-opening. That's why I like Monarch. It helps you see exactly where your money is going, and more importantly, where your tax refund can make the biggest impact. Because the goal isn't just to look backward, it's to actually make progress.

Simplify your finances with Monarch. Monarch is the all-in-one personal finance tool designed to make your life easier. It brings your entire financial life, including budgeting, accounts and investments, net worth, and future planning together in one dashboard on your phone or your laptop. Feel aware and in control of your finances this taxi, and get 50% off your Monarch subscription with the code Pockets. What I personally like is that Monarch keeps you focused on achieving, not just tracking.

You can see your budgets, debt payoff, savings goals, and net worth all in one place. So every decision actually moves the needle. Achieve your financial goals for good with Monarch, the all-in-one tool that makes money management simple. Use the code Pockets at Monarch.com for half off your first year. That's 50% off at Monarch.com code Pockets. I love Matt, said no one ever. Nobody starts a business thinking, you know what would make this more fun? Calculating quarterly estimated taxes, but somehow every small business owner ends up doing it.

Your dreams of creating, selling, and growing get replaced by late nights chasing receipts, juggling invoices, and wondering if that bad sushi lunch with Scott counts as a write-off. Change all that with Found. Found is a business banking platform built to take the pain out of managing money. It automatically tracks expenses, organizes invoices, and even preps you for tax season without you doing the heavy lifting. You can set aside money for business goals, control spending with virtual cards, and find tax write-offs you didn't even know existed. It saves time, money, and probably a few years of life expectancy.

Found has over 30,000 five-star reviews from owners who say, Found makes everything easier, expenses, income, profits, taxes, invoices even. So reclaim your time and your sanity. Open a found account for free at found.com. That's F-O-U-N-D.com. Found is a financial technology company, not a bank. Bank. Banking services are provided by Lead Bank, member FDIC. Don't put this one off.

Join thousands of small business owners who have streamlined their finances with Found. Audible has been a core part of my routine for more than a decade. I started listening years ago to make better use of drive time and workouts, and it stuck. At this point, I've logged over 229 audiobook completions on Audible alone, and I still regularly re-listen to the highest impact titles. Lately, I've been listening to Bigger Leaner Stronger for Fitness, the Anxious Generation for Parenting Perspective, and several Arthur Brooks' audiobooks that have been excellent for mental well-being.

What makes Audible so powerful is its breadth. Beyond audiobooks, you also get Audible Originals, podcasts, and a massive back catalog across business, health, parenting, and more, all accessible in one app. If you're looking to turn everyday moments into real progress, Audible has been indispensable for me over over 10 years. Kickstart your well-being journey with your first audiobook free when you sign up for a free 30-day trial at audible.com slash BP money. All right, welcome back to the show. While this was going, I was just putting in like this home as a primary, I was saying, hey, let's, let's, let's, let's, let's, let's, right here. Let's just put it at the sheet and see. How would you guys categorize this property as a rental if I immediately converted it to a rental in your personal financial statement? And how would you,

what would you put in for these estimates basically on it? Yeah, so line three, where it says Seminole Circle, that is our primary residence. Oh, sorry. Okay. So we do have this right here. It's honestly hard to say. We live right now. It is the number one real estate market in the country, Harford County. And so, like, granted, our house would, we'd probably put it up for like 525, 550. Everything here is going a day on market, 100K over asking. So it's hard to know exactly what we would get. I personally think we could probably get almost close to six, but we're playing it a little bit safe that we'd list like 525, 550.

Rental right now, I think we could get somewhere between like 4,200 and 4,500, just given what I've seen on Zillow that's up for rent. But again, there's like nothing. There's no inventory here. And like the intangibles of our house, like it's a busy metro, but we live on like a quiet circle, walking distance to the schools, we back up to a golf course. So there's some intangibles there that could put us on the higher side, but we went more conservative. So 4200 is probably what we'd be able to get from it. Keeping in mind, too, for the first year, I would find our tenants and manage from afar,

but then I have to put property management on every single one of these properties, which is going to take 10% off the top of everything because I'm not going to be here to manage it and do like tenant turnover and stuff. Okay. Well, I like these numbers as a rental in here. So I can see why this is a hard choice for you, right? This is $4,200 as your conservative approximation of near-term rent on a $525,000 asset is a great deal. I would buy that if that was for sale here in Denver, Colorado, with that rent-to-price ratio. Your property taxes are likely much higher relative to the property's value than they are here in Colorado. Insurance is probably similar. I don't think there's a lot of natural disasters in Connecticut out there. I think that's what of the appeals of the Northeast.

there. So I imagine that this is, that this is actually, you know, I don't know what this number is going to be like for CapEx Vacancy Management. That's pretty optimistic, right? Because if you have one month of vacancy, you're going to be out 42, you know, more than that. So I think there's a little bit, you know, maybe more conservative. But this is not a bad rental. Like, this is a cash flowing rental the way that you just described it here and makes some sense. I think the part we struggle with. So they're all older homes up here too, because it's the Northeast. So it's a 1956 Cape, we've done a really good job of maintaining it, but we also know like that our HVAC is definitely, it's on borrowed time right now. So like we're going to have an HVAC repair. The roof would probably be the next five years, seven, seven years. And then we also know our water heater is probably on borrowed time too. So we have a good amount of CAPX coming up in the next five to seven years, which essentially I'm like, I don't know. I want to rent it and deal with the headache of it just to put everything into CAPX. Whereas if we.

it right now. It's such a competitive market. We don't need to fix that stuff. Like, somebody buying it will fix it. So that's what can go wrong. What can go right here on the rent side? Oh, that rent could just keep going up. So the other part about the Northeast and West Harvard specifically, there are no new builds unless you're buying a condo. Like, there is no space to put up a new home. So if you want to live here, you're buying what's built. Like, we don't have to worry about somebody building a whole new development of single-family homes. So I think that it will stay a competitive market for at least the foreseeable future. And what I was going to say to with our primary home, we bought it in 2017, 4% at 30 year fixed

rate. We refinanced in 2020 when the rates dropped. So we got a 2.5 and it took out a 12 year. So in 2032, it will be completely paid off. And so that's the hard part. It's well, we have a 2.5% rate. We're never going to see those again probably in our lifetime. And we can have it paid off in another, you know, six and a half years. So yeah. Even though it's an old house, There's a lot saying, hey, hold on to it, right? So yeah, it's just hard to figure out what to do. What's the gain? What'd you buy it for?

Oh, 325. 325 in 2017. So it's appreciated, you know. I think it would go for more than 525 too if we sold it. That's just like a conservative estimate. I like conservative estimates because if you listed for 525 and sell it for six, you just have an extra $75,000. But if you're counting on the six and then your numbers don't work because you didn't get it,

I love shooting for the stars with what you're renting it for because you could also just sell it. I love the idea of renting it for a year to test out your new location. Have you ever been to your new location or live there or like, why would you move? So it's where I had the Airbnb in Florida. So we've visited there quite a bit. We really like the area. I am so over Connecticut winters. Like I want to be in the sun.

I want to be near the beach. Like, I want to live in a golf cart community and take my kid to school on a golf cart. Like, I just am not into the Northeast anymore. And what kept us here for so long is because this is where I had my business anchored and I had all my connections here. But I've, like, decided this was the last year I'm running it. And he works fully remote. Right. We moved to Connecticut originally.

My corporate job was here. We moved here in 2017. So, you know, I'm pretty much fully remote now. I travel a little bit. But yeah, like she said, besides the weather, you know, too fast. are the taxes in Connecticut and just keep going up. Whereas like, you know, we like the tax structure in Florida a little bit more. And to be honest, the politics in Connecticut, right? We're bigger fans of the Florida politics too. So there's part of that is why we want to make the

move. And like we said, we don't want to buy there right away. We could always test it out for a year or two by renting. And then if we realize that's not for us, we can move back to the Northeast. Connecticut may not be the place to move back to if we decided to back. Yeah, it's never been our home. So it was like we came here for jobs. It's not like we grew up here. Our family is not in the state. So it was for work. And now that we have the opportunity to go somewhere else, like at first when the housing market did what it did, we're like, oh, I guess we're here forever because we have a 2.5 percent interest rate. We're never leaving. But now I'm like, we have this money. Like I want to live somewhere where there's more things that I enjoy doing. Okay. So the

annoyance factor on this property is a two. We can't necessarily say what the annoyance factor would be yet. I'm just anticipating, like knowing how many years we've lived in the house. There are little quirks with it because it is an older house that I'm just envisioning, getting phone calls being like, oh, I can't even picture what it would be. But there are quirks because it's an older home. Yeah, plumbing issue or just things, you know, cabinets, you know, appliances. But yeah, those are things we build into the CAPEX estimates. And like Scott pointed out, that $500 is probably very because we probably need to make that

a much higher number. But you're also being conservative here in the rent, right? Like, you think you can get more than that for rent next year, right? I think we probably could, yeah. I'll run the numbers on the sell-vers-keep calculator and send that to you as a follow-up here. We'll re-discuss that on the show briefly after we run them. But I think that my bias is going to be very heavily keep the thing for at least a year or two, but make a decision really well-informed at the, you know, 18-month mark to, hey,

are we really going to keep this and abandon that tax-free capital gain, or is this a sell? Like is it not quite coming up to those expectations. But I think there's a real possibility in 2026 and 2027 that this country sees pretty strong rent growth. I don't know how that's going to affect Connecticut. I don't know that market that well. But I like places that are not seeing a lot of supply. And I think that the prolonged higher interest rates and the fact that all of their net deliveries

across the country have slowed here in 2025 is a reasonable case for rent growth going into the next two years, that could be a good ride over there, especially. since this property is worth more to you than it is to almost anybody else, given the financing that's on it. I think that's just been the hardest part of figuring out what we do. And then also, I think we'd have to factor in, let's say I did rent it for 4,200. For the first year, if, like, I'll do the tenant screening and I'll get somebody in here and I'll manage it from afar. But if we choose to keep it after that and they want to move out and we have to turn it over, I have to get property management on it. I just, I can't come back and do all of that stuff. So that would

just be something to factor in too. But we've said the same thing that like, okay, let's maybe try it for a year or two, but then if we are wanting to unload it at that point, it would have to be there just to not have to have the capital gains tax on it. Because I'm like, if we're going to keep it for more than two years, then I'm keeping it for like 10 or 15 years, I'm not going to sell it after year three. And then we're like, oh, well, we just have to pay a bunch of tax on the property now. I have two issues in grappling with this in this analysis because, yeah, like you could say, oh, it's negative cash flow with a $3,100 mortgage payment plus property management, plus more conservative assumptions on this. But that's not fair because you're comparing this mortgage

payment to it, not its peers. These other mortgage payments and other properties are, I imagine, 30-year fixed-rate mortgages. And that is not the case on this property. You're using a very, you're using accelerated amortization schedule, which is giving you an artificially low view. This is probably going to be paid off in six years. This is one of those scenarios where the decision for this house is not in the next five or six years going to give you that flexibility. and I don't like those decisions because it's not going to put money into your pocket in a really noticeable way. And that's not why I get into real estate personally.

But you also have this unique, awesome financing at 2.5% and the opportunity to pay this thing off. And at that point, then all of a sudden the cash flow explodes. That's like replacing, John, your disability pay almost as soon as that thing's paid off. And at $89,000 in total spend, you have that property paid off and you have this disability pay, wow, there's a lot of options there. That covering that spread adjusted for inflation is not going to be very scary for you guys as a household, I think, at that point. So that's one of the, that's one of the think reasons why I can look at this and say, no, you're not going to cash flow

very much during the next couple of years, but there's a real case to be had for keeping this property, even with the gain being excluded. Okay. Yeah, and I think that's really what we were hoping to have somebody else, like, help us figure out. It's like, let's say we did sell it, and then we have absolutely no mortgage and we are putting an extra, what, $3,000 a month now into like a stock portfolio forever? Like how, like which one looks better in the long run? Or is it close to a wash? Like this is like a weekly conversation of like, what do we do here? Which one makes more sense? Like I can see why. This is really hard. This is like one of the, I think this, I think when we modeled out of the numbers, it's going to be very hard for this one for a silver scheme because

of what you got there. Go ahead, Mindy. In the beginning where she was telling her story, I heard her say, and I even wrote it down, I don't love managing properties. And is your primary residence a good rental? Yes, it is. We've already discussed that. But you don't love managing properties. You have, quote, unquote, extra money every year that you're not spending. You're just putting into the stock market. If you don't have any ties to this location and you don't want to live there, why would you hold on to it for a year just in case? It sounds like if you, move to Florida and it doesn't work out, you'll find a different location to test.

You won't go back to Connecticut, right? Yeah, I think that's probably pretty accurate. I think just for peace of mind, we know we're going to rent in Florida for the first year that we weren't going to need that money in year one anyway. So we figured, why not just rent it for a year instead of just selling it and just see how that one year goes while we're also renting? Not that we would come back here, but then after a year if it's not going well with rental or if we are like Florida is not it and we're not sure where else we want to go,

like we could come back for a year or two while we figure out our next plan. It was just more to still own something of our own just in case we needed a fallback plan if Florida didn't work out after like a year of us renting down there. I don't think this is where we're ultimately going to end up, but it would just be like a landing pad if we didn't want to like stay in Florida. Let me approach this from a different angle given that Mindy's great comment there. That is right. You said you don't really love being a landlord here.

Let's say we sell the place. We take our $300, let's call it $20,000 in equity after sales costs. We add that to the pile of $413,000 in cash. And you use some of that to buy a home outright in the new area. You could do this today or you could do this in a year, as long as it's within that window for the tax or capital gain. So I think there's an argument for, hey, you might want to just wait on this and hold it for a little bit while you look for that next, wherever you're.

want to live next. And you swap that out. Well, if we go back to your income and expenses and we see, hey, you're spending $8, $90,000 a year. But if your rent and mortgage payment went to zero, you use that to pay off the house, that's the same flexibility feeling output, you know, as the paid off rental producing, you know, something around $30,000 a year in cash flow. So now we have to earn $52,000 a year, you know, minus, you know, another $100 a month for golf cart service. That goes a long way with your reserve pay and your military disability pay alone, John. You could literally take several years if you made that move and not work or float a little bit in part time with your cash position still having plenty of cushion even after that set of moves

and buying a paid off house of the same value. I also think that there's the argument for that would be in Connecticut, I imagine, you're finding a pretty neutral market would be my guess. It's not really a buyer's market. It's not really a seller's market to the same extent. Like, we're seeing a buyer's market here in Denver. Is that true at all? It's a seller's market here, for sure.

Oh, it's a seller's market. So it's just straight, it's a great time to sell in there. There is no inventory and there's a lot of demand for wanting to come here. So everything is still in bidding wars like going over asking, which is the other reason that I'm like, do I strike now while it's still like very, because I kind of got burned in Florida. Like I could have sold my Airbnb like a year and a half before I did and made way more money off of it. But instead it took me nine months to sell it and I barely made a profit.

So I'm like, I don't want to end up in that position again. While we have still a very hot sellers market here in Harford County, do I do that? Well, I know I can still go over and I don't have to make any concessions on the house. Like, I'm not going to be asked to fix any of these things because somebody else will come along and scoop it up if the current buyer chooses to back out. So that's like the other part that we're like, we know we will probably go over asking and we're kind of in the driver's seat still in this market. Well, great.

So that's like an argument of selling in a seller's market and buying in a buyer's market. that's a really great arbitrage opportunity. Florida's is real. It's just devastation right now. It would be nice to sell, you know, after that horrible experience to actually buy into that environment to some degree. And I will say the argument there is, even though your debt is awesome on this property, it's relatively small at $155,000 compared to your asset base of $3 million here. If you did forego it, it would not be the end of the world. It would not be this like monumental decision that would fundamentally change your timeline there. That's the other argument in front. See, I'm now joining you on the flip-flopping in the matter of minutes on what to do with this property.

I don't like, it is hard. It's really hard with this with this one because it's actually a good rental in a lot of ways. Well, let's throw another wrinkle in there, Scott. The current administration wants to see rate cuts. And I truly believe that when rates start with a five, we're going to have an all-out bidding war everywhere. We still have a nationwide housing shortage. You see. said people are moving to your location and there's a housing shortage and all you can get new is a condo. It doesn't matter that this is an old house. It's not like it's the only old house in the city. There's lots of other old houses. So it's like it's a thing. Whatever you ultimately decide to do and next spring is going to be a hotter. Wait, when are you talking about moving?

So we'd probably be moving next summer, July. I think regardless it's going to rent for a year unless something drastic changes and we're like there's no way we can like pass up on. the opportunity to sell it. So if we were to sell, I think it would probably be spring 2027. Okay. So spring 2027, I don't think a rate cut is the right idea right now. I think that because we have such a shortage of housing, people will jump back in and cause inflation to it spike. But nobody's asking me my thoughts on the monetary policy for the United States. However, I can see a position where rates get cut, inflation goes up, and then rates have to go back. up again. You said you might move in July. Could you move sooner? If he's totally remote and you're

getting a different job? We could. Yeah. So my job, I was a wedding and event planner. So like I'm booking 18 months out. So I do have a client, like I do have two clients for next season already. And I kind of was hoping to only have to fly back for one of them. But like if push comes to shove, I could fly back for both. But so we were kind of hoping like July that is so just so I could be here for June because I have I have a client. But it's not like a must do. It was just like that worked out nicely for us. Okay. So here's a scenario. Then I would get an agent in each location, get a Connecticut agent and get a Florida agent. Explain what you want to do. I want to take advantage of what's going on in the market. Can you keep me posted? Like send me listings for the location,

the Connecticut location that are similar to yours. Because let's say you've got a four bed, three-bath house with an attached garage and a quarter acre, you want that kind of stuff being sent to you because that's what people are looking for when they're looking at your house too. So have them send you these listings so you can see what's going on. Oh, I thought I could get 525, but really they're selling right at 525. Maybe it's not such a big deal. Or I thought I could get 525 and everything's going for 650. Maybe I just want to cut and run and go down to Florida because your Florida agent keeps sending you price cut after price cut after price cut. And you are never going to get the top of the market for your Connecticut house and the bottom of the market for the Florida house.

But you could make a more informed decision based on what's actually happening instead of, you know, oh, maybe I'll be able to get a really great deal in Florida. And then just see, like, do you know what area of Florida you want? Yeah, we do. But there's several different neighborhoods. So that's why we wanted to rent because we just want to make sure. sure like we like the feel of the neighborhood. We like the community. So we definitely want to rent first because we didn't do that when we moved here. And luckily, we picked a really great

town. But we had said if we had moved here, we would have preferred to have rent because we do like some of the neighboring towns that just offer a little bit more bang for your buck, a little bit more property than what we got here in West Harford. But again, like we picked a great town. So we will see a great return on the investment that we made. But just for quality of life, we want to make sure we're picking the neighborhood, that feels like the best fit for us. Yeah. As somebody who moved and two weeks later looked at my husband and said, do you want to move out? And we had bought a house. Renting is a really great option. We put that house back on the market three months after we bought it and it sat for a year because it looks like there's something

wrong with the house when you put it right back on the market. So absolutely rent. That's a great idea. I am older than you and want to declutter my life. I would lean towards, like, keeping an eye on the Connecticut market, but selling when you can, making peace with the fact that you got a great return on your investment and you're done with a property that you don't want to own anymore. Because you don't like to be managing properties, even with all of the money that you could make monthly, I would just sell it and be done. In my gut, that's what I feel because I just know, like, he laughs because he knows, like, I'm going to be the one fielding the phone calls from the tenant. And then he's going to be the one

hearing me being annoyed about it. So he's like, I, like, and I'll be the one dealing with it. And I'm like, the whole point of this move is to kind of like simplify our life a little bit, like be in an area that we can like be outside, be at the beach. Like I really want to like put my time and energy into creating like a community down there of like great friends for our daughter and for us that I'm like, I don't want to deal with this. And I also like, this is just minor. And it's the way my brain works. But I'm like, I hate the idea of paying a property manager to do nothing. 11 months out of the year and then like just come turn it over like one time or answer one phone call and then they're still going to call me say hey I need you to cut a check to fix this and I'm like

oh like so I don't know that I want to put a property manager in it and be just I don't know but I also like if it was drastically going to improve our financial position over the course of 10 to 15 years I would tolerate it but if it's like going to be almost a wash of having no mortgage and investing the difference, then I would prefer to not have the headache. All right. We're going to relocate for a few minutes, and we'll be right back after this. Tax season is one of the only times all year when most people actually look at their full financial picture, including income, spending, savings, investments, the whole thing.

And if you're like most folks, it can be a little eye-opening. That's why I like Monarch. It helps you see exactly where your money is going. And more importantly, where your tax refund can make the biggest impact. Because the goal isn't just to look backward. It's to actually make progress. Simplify your finances with Monarch. Monarch is the all-in-one personal finance tool designed to make your life easier.

It brings your entire financial life, including budgeting, accounts and investments, net worth, and future planning together in one dashboard on your phone or your laptop. Feel aware and in control of your finances this tax season and get 50% off your Monarch subscription with the code pockets. What I personally like is that Monarch keeps you focused on achieving, not just tracking. You can see your budgets, debt payoff, savings goals, and net worth all in one place. So every decision actually moves the needle. Achieve your financial goals for good with Monarch, the all-in-one tool.

that makes money management simple. Use the code Pockets at monarch.com for half off your first year. That's 50% off at monarch.com code pockets. You just realized your business needed to hire someone yesterday. How can you find amazing candidates fast? Easy. Just use Indeed. When it comes to hiring, Indeed is all you need. That means you can stop struggling to get your job notice on other job sites.

Indeed's sponsored jobs helps you stand out and hire the right people quickly. Your job post jumps straight to the top of the page where your ideal candidates are looking. And it works. Sponsored jobs on Indeed get 45% more applications than non-sponsored posts. The best part? No monthly subscriptions or long-term contracts. You only pay for results. And speaking of results, in the minute I've been talking to you, 23 people just got hired through Indeed worldwide. There's no need to wait any longer. Speed up your hiring right now with Indeed. And listeners of this show will get a $75 sponsored job credit to get your jobs more visibility at Indeed.com slash bigger pockets. Just go to Indeed.com slash bigger pockets right now and support our show by saying you heard about Indeed on this podcast. Indeed.com slash bigger pockets. Terms and conditions apply. Hiring, Indeed is all you need.

When you want more, start your business with Northwest Registered Agent and get access to thousands of free guides, tools, and legal forms to help you launch and protect your business all in one place. Build your complete business identity with Northwest today. Northwest Registered Agent has been helping small business owners and entrepreneurs launch and grow businesses for nearly 30 years. They're the largest registered agent and LLC service in the U.S. with over 1,500 corporate guides who are real people who know your local laws and can help you and your business every step of the way. Northwest makes life easy for business owners. They don't just help you form your business. They give you the free tools you need after you form it, like operating agreements, meeting minutes, and thousands of how-to guides that explain the complicated ins and outs of running a business. And with Northwest, privacy is automatic. They never sell your data and all services are handled in-house because privacy by default is their pledge to all customers. Visit northwest registeredagent.com

slash money free and start building something amazing. Get more with Northwest Registered Agent at Northwest Registeredagent.com slash money free. Thanks for sticking with us. Okay, picture if you will, your daughter's fourth birthday in Florida and you have to go deal with a roof leak and a water heater leak and the furnace is out and you're like, all I want to do is be at this party and all I have to do is all this stress. You have $200,000 a year that you're not spending that you're currently earning. I say, ditch the house because you don't like doing it, you don't want the stress and it's long distance and you, I don't want to play property managers either. And there are some really great property managers out there that are worth their money. But you're not going to

find them. Sorry. Mindy, I'm right there. Like, I have very high standards. So I get like, I have a hard time hiring people to do things because I'm like, oh, I know I could do this better. We're the same person. I think I'm now, I'm now flip-flopping again back to selling the house here. And I think it's because of the lack of materiality to your position here. Like, like, what are we actually looking at here? We're looking at a couple that is really successful financially. You're multi-millionaires. Your coast five several times over if you never contribute another dollar to your retirement accounts. You have $30,000 in inflation adjusted. passive income for life with the disability pay. You are still getting military reserve pay.

John, we didn't talk about this, but you're eligible for basically a full pension. That I believe is inflation adjusted as well at age 60, right? So whatever retirement needed here, we're done, right? Like, we're all done with, you know, from that perspective. Your largest expense, literally a third of your expending is your mortgage payment here. And the only reason that's so high is because you've done it, you're paying it on an accelerated basis. So once that's gone, You spend 60 grand a year. Even in your new golf cart community, you know, here, Florida is going to be not a major cost of living increase over Connecticut.

I think the game is like, you've won, let's finish the play overall with your financial position. There's no point in this position of having these two, sorry, I'm calling rinky dink rentals here that are tiny and that have a combined 200K in equity, less than 10% of your total net worth. It's not your business. You don't care. about this, you're not really interested in it. And why would you add another rental in your home

when you have this tax advantage? You can sell that and the other two properties as the time emerges over the next year or two. Pocket that equity and put it into your financial position. And then you can move into a more diversified portfolio. And like the game is so far over at that point. You can work if you want to to pile on things or fund nice trips or increase spending.

Or you can just literally both chill and continue to pay for child care so you can have adult time on a full-time, a part-time basis in the indefinite future. Like, that's where I'm, I think that's, I think that without like really thinking through the rest of the situation, I think that's so overwhelming now in favor of selling the property. It's not really about the finances.

Like, we really drive it, dive into it. And what is the best financial outcome for that property? There's a potential to keep it. There's a potential to sell it. But in the context of what we just said there, this is like, hey, this is a really good chance to just like reset the financial position and have. so much cash flow coming in relative to your spending on a monthly basis that it feels good

all of a sudden. It feels like your position is actually what you've built all these years is actually working for you to support the life you want. We've been thinking similar, Scott, and to Mindy's point before about renting as a good idea for a year. Obviously, with Florida being such a buyer's market still, we didn't want to buy and see equity go down right away either, right? So like that's other thing. We're rent for a year. We'll let maybe there's a rate, decrease, prices to go down, and maybe we catch it. You know, we're not going to time it perfectly, but maybe waiting a year is better.

But yeah, certainly, you know, and me still working full-time corporate. I plan on doing that for several more years still. You know, part of it is I work in aerospace and defense. And there's always a risk of layoffs too. But it's a nice piece of mind, just like you were saying, Scott. If I was to get laid off or choose to leave in a month or two or this year, we're still fine. We're fine for several years. You know, we're both going to work part time anyway. So, yeah, it's more of like, how do we simplify our lives and to that point, maybe selling the

properties, right? They're not generating a lot of cash flow. Maybe that is the best play, right? I just to like add to that really quick, John is going to keep his corporate job at least for another couple years. But then like, like, I've already cut my job down and cut my income down. And I think in the next like five-ish years, like John wants to also leave corporate and just do something that it's going to pay less, but that he likes doing, whether it's like personal training or like Florida of wildlife, like something that he likes. Something where I'm not on a laptop all day, right? I think it would just like have nice piece of mind. Like if our household income got cut in half or even like more than that to just know like, all right, our house is paid off and we don't have any other like properties.

Because I also, I'm always like a worst case here. I'm like, what if we put somebody in our house here and they're horrible tenants and they're not paying and I have to evict them and John left his corporate job. And like I kind of spot and I'm like, I don't want to have to deal with that kind I would say that renting for a year does not preclude you from selling the home immediately, right? Like, then you just say, we're going to pocket 200 gain in tax-free capital gains, plus, you know, the recovery of our original equity on this minus seller fees, right? There's going to be a large cash flow. So even if you just set aside 40 grand of that to be your, hey, this is going to pay for rent for the next year,

and you just mentally do that. Like, that's great. Like, then you can buy the house after a year if you decide, hey, that's going to be our permanent place, probably still. into a buyer's market. If we get in really philosophically, like, which market's going to outperform over the next 30 years? I would bet you it's going to be Connecticut over Florida. I think Florida's got really tough challenges with insurance and those types of things. But that's not what this is about. This is about having a wonderful lifestyle for the next 10 to 20 years or

where you want your kids to grow up and hang that off. And so the game is won. And I think that after a year, you buy your place, regardless of what you do with the place that you're living in now, I think at that point, John, I'm glad you want to continue working. That's great. But I think that if you have $50,000 in expenses and $18,000 just with military reserve and disability and some of those other stuff going on, the pull of the call of the wild, if you will, with that new job is going to come a little sooner than you might expect if you actually create that position of flexibility and sit on it for a year or two.

This has been great. I think you guys kind of solidified that we're going to get rid of this house. Just with everything with what our goals are, I think it just doesn't make sense to even if financially it would work out that we make a little bit more by keeping it. I think just from a stress level and what we're looking for out of our life, it's like you said, Mindy, if we're solely living to just optimize but it's bringing on a headache and it's stressing me out, then is that really optimizing? Like dollar amount it's optimizing, but like emotionally, socially, like, is it moving us forward or is it just like another drain that I don't want to deal with? And again, I keep coming back to that. Likely, you do not feel rich because your numbers are not as big as like the chubby fire or fat fire community. But you are because your spending power in practice is there. The timing will be different with that pension when that comes in. But like, that's a real asset.

That's a several million dollar when it begins retirement asset. That changes the game and puts you well into the ability to live a chubby, if not fat fire lifestyle. pretty soon, if not, chubby for sure now, and that in the next couple of years, depending on how things go. And certainly at retirement age, unless something goes horribly, horribly wrong. That's something just, I think that's the big change. And now the game that, if you agree with that, the game goes from how do I optimize my financial position, which is what you're struggling with the house, to how do I optimize my life

in the context of this? And that's a different game. And it'll be a mindset shift there. That's really where we're at is how do we optimize our life? That's been really helpful. And now I've stopped moving on the house. because of that framing. Alyssa and John, thank you so much for being so transparent with your numbers.

This was really, really fun. And I know people listening got a lot out of it. So thank you for your time. And we'll talk to you soon. Bye. Thanks, guys. All right, Scott, that was Alyssa and John. And this was a really fun finance Friday.

I believe that Alyssa and John are in a similar position to a lot of people in our community. Maybe they got into real estate because that was the thing to do 10 years ago. and they don't like it. Or maybe they're like, oh, I'm really having a hard time identifying with my net worth. I heard a lot of my own story in theirs too, but I really love the conclusions we came to them. What did you think, Scott? I had so much fun. It's fun because my style, right, and it gets me to trouble all the time. But I always start with a hypothesis and then I iterate. And so I was so wildly wrong in my first hypothesis because they came in asking about the primary residence. And we're okay, well, it's the right move with the primary residence.

But there may be a mathematically optimal move for the primary residence. But in the context of this situation, we kind of is able to zoom out and say, guys, like, why are we optimizing for, you know, a couple of dollars here on the ROI of what to do with this primary residence when the game is so far and away one that we can begin optimizing for something else that is of much higher scale or much more important here, which is the overall life activity set. And we can kind of declare game over with a couple of key moves here. And what I thought is so strong about their position, of course, is, is yes, we have a great net worth and good asset location and clear intentionality about building wealth.

We've got good income. But we've really got these fixed income streams in the disability, the reserve pay that will continue for least a couple more years, and then the military pension. And that's like the military guys is such a powerful way to achieve financial independence. For those who are doing it right and smart and have done a career in the military, they feel like, Like they're underpaid in many ways they are, a lot of military folks underpaid for many years in these circumstances. But if you play your cards right and are smart about it and serve long enough, you create assets that are really valuable in the context of the financial independence journey. Like we noticed we didn't talk about health care, right? That's not a conversation in this particular case, right?

It doesn't even mention, you know, because of the benefits that we get. And so I think that there's a lot of really cool advantages there. And I wish more military folks would really internalize. this because the world is their oyster in so many ways if they're able to take advantage of those benefits and then pile on the basics of a financial independence journey on top of it. So they're going to be golden and I hope that the next two years are kind of the internalization of, wow, we made it and we can really design our day however we want. And if we want to build more wealth, we can do that in a way that's congruent with what we want. Two-thirds of Bigger Pockets money

listeners are at least passively interested in starting a business after financial independence. that's perfectly fine for these folks. They can do it all. They can move to Florida, have what they want with that golf car community, continue to build wealth if they so choose, entrepreneurally, and continue to begin passing wealth in a major way to the next generation.

I truly believe that's entirely possible for them in every direction. And I think that there's a good chunk of people out there in the fire community who are in a same boat and just haven't internalized it yet completely. I'm very lucky to be in that same camp to a large degree, and I'm still going through that processing here. in the course of this year. It's fun to see it and it's a wonderful outcome in it and it's now a process to to really just enjoy and expand on that opportunity. Scott, you hit the nail on the

head. You said you think there's a lot of people in our community who are in a similar position but just haven't internalized it yet. I encourage everybody to go to biggerpocketsmoney.com slash resources and download the personal financial statement. Fill it out and see where your finances are. It gives such a holistic view. of where you are at. Conversely, you can go to Monarch Money. If you don't have a Monarch account, you can get 50% off your first year by using the code pockets when you sign up. And you connect all of your accounts and it's more of a real time look at your financial situation. And if you have not filled out the personal financial statement yet, that is day one of our 31 day challenge.

You can sign up for the email challenge that Scott and I have put together, 31 days of emails that send to you to give you a great starting point for where you can go with your finances, gives you a holistic look at your finances, and then sends you on paths to make them even better. You can sign up for that at biggerpocketsmoney.com slash 3.1D-A-Y-S. All right. I think that's enough promoting of all of our. We have a new website, biggerpocketsmoney.com. Go check it out.

We have a lot of things for you. And we will continue to be adding new things all the time because Scott is leaning into his inner nerd and becoming a programmer as well. So he is constantly looking for more things to put up there. And hey, if you're looking for a document or a spreadsheet that you want Scott to do his spreadsheet magic on, send him an email, Scott at biggerpocketsmoney.com. All right, now I think we should get out of here, Scott. All right, let's do it. That wraps up this episode of the Bigger Pockets Money podcast. He is Scott Trench. I am Mindy Jensen saying chop, chop, lollipop.