A Transitional Year
Adam and Kali are considering relocation to Nashville. They own a home. Should they hang on to the house for a year just in case the move to Nashville didn't work out?
QUESTION: Adam and Kali in Financial Peace Plaza live in Los Angeles, and they’re considering relocation to Nashville. They own a home, and if they move, they would rent for a while before buying again. If they sell the house in California, they could pay off all their debts. Should they hang on to the house for a year just in case the move to Nashville didn’t work out?
ANSWER: Yeah, that’s fine if you wanted to rent your place out for a year. I wouldn’t do that as a long-term game plan, and I don’t want you to become landlord by default where 10 years from today you’re going, “Well, we’ve got this house over there in L.A. from back when we used to live there. We’re real comfortable now in Nashville, but we never could get rid of that just because we emotionally think we might go back someday.” No, grow up and sell the freaking house at that point. But at this stage of the game, it sounds like this is tentative and you’re trying a culture shift, a career-change direction—at least a change at a minimum but maybe even a direction change.
Yeah, one year would be fine. The California real estate is recovering rapidly and certainly in the L.A. market—the majority of it anyway. Some areas are just white-hot now again. You might make a lot of money during that year, too. That’s a side thing. I really wouldn’t do it just for that, but it’s not like it’s going down so you’re kind of safe to play this game for a year.
But again, I think one year, you need to make a call. Maybe a one-year lease and then put it on the market or move back, one of the two, and then I would just rent in Nashville. I wouldn’t buy until you do that and see how your career works, see how you like the community, those kinds of things. Then you do kind of have that “safety net.”
In most markets, I probably would have had you sell it, but the differentiation between L.A. real estate and most other areas of the country is so vast that it would be hard for you to get back into that market were you to want to return, so your case is valid or the point you make’s valid. But be willing really deep down in your heart of hearts and pinky swear and spit shake with each other we’re dumping this thing if we’re staying. We don’t need a perpetual safety net.