Paying for college
My wife and I have an apartment building that we bought for $126000 and is appraised at $180,000 now. We owe $109000 on it at 5.5%. payment is $1100 and we are paying and extra $2500 a month on it for a total of $3600 and it will be payed off in May of 2024 when our son will have graduated from HS. I think I will get around $200,000 for the apts. and will have to pay around $15,000 on capital gain tax. Should leave, give or take around $160,000 for college. Question, is this smart paying the extra $2500 and getting the apts. paid off or should we be doing something else with the extra $2500? Or is there a better plan?
Thank you for your time
Terry Says
Gosh, I’d have to know a lot more about your financial situation to give you good advice. Apartment rentals could be a nice stream of income in the future, but you’re not planning to keep the building! And rental income might be subject to your ability to evict non-paying tenants -= as we’ve seen during the pandemic.
Also your mortgage rate is pretty high. Not sure you could do much better on a commercial building. And it’s probably not worth refinancing with only 3 years left, if you want to sell. BUT, if you wanted to keep the building and the income stream, and if you could refi to a significantly lower rate (around 4%) then maybe you would consider refinancing, taking some money out to help pay for college — and keeping the building??
That’s why you need a financial planner to look at your overall situation. Find one you can trust — a FIDUCIARY — who puts your interests first, at Wealthramp.com.