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alexdeonisimm

Remodel or buy second home?

Alexis
8 years ago

We bought a 1930s key west style house in Miami. It's a duplex and right now we have the 2nd floor apartment on Airbnb. The overall house has the potential to be nice--but the previous owners stripped it of all its charm. Cheap laminate fake wood flooring, horrible windows (a couple windows that are literally just sheets of glass and wood built into the wall to look like windows), a bathroom that is a total disaster (made with leftover stone and tile and a haphazardly built shower). The yard is huge and fantastic and the neighborhood is our favorite. We got the house at 290K a little over a year ago. I'm guessing we could easily sink 100k into it to get it to a point where it was nice (impact windows, update a/c, redo floors, add screened in porch).

I'm wondering if maybe we should just AirBnb the 1st floor too (top floor rents for $125/night and bottom could rent for $150+) and buy a 2nd house. We'd have to borrow against first house for downpayment. And right now the market has skyrocketed since we bought our first house so we'd be looking more in the 400k+ range. The income from the first house could conceivably cover both mortgages.

OR, should we take out a HELOC and try to make this house as nice as possible. At what point are you spending more than it's worth?

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