Transcript

Which Path to Financial Independence Is Faster? Sell or Rent?

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· 45 min · 10,091 words · 93 timestamped sections

This is the full, timestamped transcript of "Which Path to Financial Independence Is Faster? Sell or Rent?", an episode of BiggerPockets Money published December 26, 2025 (45 min, about 10,091 words). It mentions 8 people, works and ideas, including Bigger Pockets, Bigger Pockets Money, Airbnb, Mindy Jensen, Scott Trench.

What is discussed, and when

  1. – 5:00: Bigger Pockets, Bigger Pockets Money, Airbnb, Mindy Jensen
  2. – 20:00: Airbnb
  3. – 30:00: Airbnb
  4. – 45:00: Bigger Pockets, Bigger Pockets Money, Monarch Money
  5. – 45:29: Bigger Pockets, Bigger Pockets Money, Mindy Jensen, Scott Trench

Notable quotes from "Which Path to Financial Independence Is Faster? Sell or Rent?"

  • Hello, hello, 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.
    about Bigger Pockets · at
  • 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…
    about Airbnb · at
  • Year. And with interest rates where they are, we're trying 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…
    about West Hartford · at
  • Conversely, you can go to Monarch Money.
    about Monarch Money · at

Who and what is mentioned in this episode?

People

  • Mindy Jensen — Person · 2 mentions · first at
    Hello, hello, 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.
  • Scott Trench — Person · 2 mentions · first at
    Mindy Jensen, and with me as always is my keeping his primary residence co-host, Scott Trench.

Books & papers

  • Rich Dad Poor Dad — Book · 1 mention · first at
    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.

Companies & orgs

  • Bigger Pockets — Company · 4 mentions · first at
  • Bigger Pockets Money — Company · 4 mentions · first at
    Hello, hello, 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.
  • Airbnb — Company · 3 mentions · first at
  • Monarch Money — Company · 1 mention · first at

Places & events

Full transcript with timestamps

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, hello, 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 uh Ellis and Jean of the first Finance Friday in a while. Um 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 um presenting your your financials for us. Could you give us a little quick overview of how you got to where you are today and 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 IAS 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 and steady approach. You know, I went into the Marine Corps right out of college as an officer and financial adviser said, "Hey, invest in 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 it's definitely paid off, you know in the in the lowcost 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, by the way. It's an honor to be on Scott and Mindy, longtime listeners of 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/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's. 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., Um,, 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 it's but to answer your question like

long story short, it's going into 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 uh that stage. I think that's uh 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 $7,000 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 decide whether we sell our house here in West Hartford but we 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 $600 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 only have to finance like $200 or $300,000. So I've been keeping a lot of cash on the side for that. So that's mostly I'd say 100K of that's probably John's and 300K is 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, it's, in, 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 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, IRA, 401ks of 550.

We have Roth accounts of 432, which is awesome. Uh 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. 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. Uh, crypto, gold, and commodities. Sorry, that could be just gold. I have a little bit of gold, too.

Um, after tax liquid investments total $431,000, and your net liquid financial portfolio value is 1.4, but we also have an illlquid portfolio, uh, $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, that's, per, year. Per, year., Oh, yeah., No,, it's, like, a,000.

Oh,, so, we'll, talk, about, real, estate, too. $12,000 a year in real estate. Hm. 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 DAFFs 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 grand 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 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 I don't know. I feel like it's not as much as it looks like. I don't 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. The Yeah, that maybe we messed up that cell. The the cash flow on real estate is about a,000 a month. So 12,000 per year. If that was meant to be per month yeah, that's not that would have changed things drastically. But

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 I'm glad you put in the annoyance factor is a one on one of the properties, but it's still like if you're earning you like this is an enormous household income and that's so small today there could be changes in the future. That's got to be kind of head scratching a little bit sometimes of hey why why are we in this when it's it's such a tiny part of our portfolio.

That's, what, we're, 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 6 and 1/2 years. But we do want to move next year. I manage our properties. I don't love managing properties. It 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 is 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 cut

but that was okay given where we were. I want to work a little bit. Like I 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 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. While Alyssa was going, I was just putting in like this home as a primary. I was saying, "Hey, let's let's try it right here. Let's just put in the sheet and see how would you guys categorize this 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 Seinal 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 4200 and 4500 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 it's a busy metro. Uh but we live on like a quiet circle, walking distance to the schools. We back up to a golf course. Like 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 cuz I'm not going to be here to manage it and do like tenant turnover and stuff.

Okay., Well,, what, I, like, these, numbers, as a rental um in here, so I can see why this is a hard choice for you, right? This is $4,200 as a your conservative approximation of near-term rent on a $525,000 asset is a great deal. Like I would I would buy that if that was off 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 uh out there. I think it's like that's one of the appeals of of the Northeast there. But I so I I imagine that this is that this is actually, you know, I 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 1 month of vacancy, you're going to be out 42, you know, more than that. So, I 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 makes some sense.

I, think, the, part, we, struggle, with,, so they're all older homes up here, too cuz 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 roof.

The, roof, would, probably, be, the, next, like seven seven years. And then we also know our water heater is probably on borrowed time, too. So, we have a good amount of capex coming up in the next 5 to 7 years, which essentially I'm like, I don't know that I want to rent it and deal with the headache of it just to put everything into capex. Whereas, if we sell 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 Harford 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 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, too with our primary home, we bought it in 2017, 4% 30-year fixed rate. We refinanced in 2020 when the rates dropped. So we got a 2.5 and I took out a we a 12 year. So in 2032 it will be completely paid off, you know, and so that's the hard part is it's well, we had a, 2.5%, rate., We're, never, going, to see those again probably in our lifetime

and we could have it paid off in another, you know, six and a half years. So right, yeah, even though it's an old house, there's a lot saying, hey, keep 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?

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 list it for 525 and sell it for 6 you just have an extra $75,000. But if you're counting on the six and then your numbers don't work cuz 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 lived 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 cuz this is where I had my business anchored and I had all my connections here, but I like decided this was the last year I'm running it and he works fully remote. So,

right,, we, moved, to, Connecticut originally. My corporate job was here um when we moved here in 2017. So, you know, I'm pretty much fully remote now. travel a little bit. But yeah, besides like she said, besides the weather, the other two factors are the taxes in Connecticut 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 we're bigger fans of the of the Florida politics, too. So there's part of that is um why we want to make the move. And like we 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 decide to move back. 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 cuz we have a 2.5% 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, the I can't even picture what it would be." But there are quirks because it's an older home.

Yeah., Plumbing, issue, or,, you, know,, just things, you know, cabinets, uh, you know, appliances. But yeah, those are things we would build into the capex estimates. And like Scott pointed out that $500 is probably very cons. We probably need to make that a much higher number.

But, you're, also, being, conservative, here on the rent, right? Like you 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, sellers versus keep calculator and send that to you as a follow-up here. We'll discuss that on the show briefly after we run them. But I 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 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 I think there's a 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 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 2 years. That could be a good ride um 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 into. 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. cuz I'm like if we're going to keep it for more than 2 years and I'm keeping it for like 10 or 15 years. I'm not going to sell it after year three and then be like, "Oh, well

we just have to pay a bunch of tax on the property." Now I, have, a, two, issues, I'm, grappling, with 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 you're comparing this mortgage payment to it not its peers. These other mortgage payments in your 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 a artificially low view. This property is going to be paid off in 6 years. This is one of those scenarios where the decision for this house is not in the next 5 or 6 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 and 12% and the opportunity to pay this thing off. And at that point that 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. That 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 so that's one of 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 years." But there's a real case to be had for keeping this property even with the 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 is 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 model it out the numbers it's going to be very hard uh for this one for a silver keep because 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 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's 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 $3 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 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, we might be you might want to just use that you wait on the on this and hold it for a little bit while you look for that next wherever you want to live next and you swap that out.

Well, if if we go back to your income and expenses and we see, hey, you're spending 8 90 grand 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 hundred bucks 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 being having plenty of cushion even after that set of moves and buying a paidoff house of the same value. I also think that there's the 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 market. It's not really a sellers market to the same extent like we're seeing a buyer market here in Denver. Are is that true at all?

It's, a, sellers, market, here, for, sure. Oh,, it's, a, sellers, market., So,, it's, it's just straight it's a great time to sell in 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 cuz 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 9 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. Well, we have still a very hot sellers market here um in Harford County. Do I do that while 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 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, a, good, argument of selling in a sellers market and buying in a buyer market. That's a really great arbitrage opportunity. Florida's is real. Like it's just it is just de devastation right now. It would be nice to sell to, 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 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 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 u 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 allout bidding war everywhere. We still have a nationwide housing shortage. You 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 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. Um, 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 so just so I could be here for June because I have I have a client. But it's not like a musto. 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 get 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, um

there's several different neighborhoods. So, that's why we wanted to rent because we just want to make 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 cuz 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 great towns. 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, 2, 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 3 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. So, 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 like 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." this and I'm like like so I don't know that I want to put a property manager in it and be just I 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. 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, a 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 and I I think it's because of the lack of materiality to your position here. Like like what is what are we actually looking at here? We're looking at a a couple that is really successful financially. You're multi-millionaires. You're coast by several times over if you never contribute another dollar to your retirement accounts. You have $30,000 in inflationadjusted 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 a basically a full pension that I I believe is inflation adjusted as well at age 60 right? So, whatever retirement needed here, we're done, right? Like we're we're all done with, you know, from 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's, going to, be, not, a, a, major, cost of living increase over Connecticut. I think the the game is like you've won.

Let's let's finish the play. Uh overall with your financial position, there's no point in this position of having these two, sorry, I'm call 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 you don't care about this. you're not 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 with 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 from you can you can work if you want to to pile on things or 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 or

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 the the situation. I think that's that's so overwhelming now in favor of selling the property. It's not really about the finances like we really drive dive into it and like what is the fin best financial outcome for that property. There's a potential to keep it. There's a potential to sell it. But in the context what we just said there, this is a 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 the sudden and 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, uh, Scott, and and to Mindy's point before about you know renting as a good idea for a year. Obviously with Florida being such a buyer market still, we didn't want to buy and see equity go down right away either, right? So like that's other thinking, oh rent for a year, we'll let maybe there's a rate um decrease prices still 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'm 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 or choose to leave in a month or two or this year, we're still fine. We're we're fine for sever, 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 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 gonna 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 fiveish 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 wildlife like something that he likes.

Something, where, I'm, out, on, a, laptop, all day. I think it would just like have nice peace 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 cuz I also I'm always like a worst case scenario. 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 spy and I'm like I don't want to have to deal with that kind of stress.

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 puck out 200 in taxfree capital gains plus you know the the recovery of our original equity on on this minus seller fees right we're there's going to be a large cash inflow. So even if you just set aside 40 grand of that to be your hey this is going to be pay for rent for the next year and you just mentally do that like that's great like then you can you can buy the house after a year if you if you decide hey, that's, going to, be, our, permanent place probably still into a buyer market. If we get in really philos philosophical like what what's which 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 paying that off. And so the game is won. And I think that after a year you buy your 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 I'm glad you want to continue working, that's great. But I think that uh uh if you have $50,000 in expenses and 18 grand just with military reserve and disability and and some of this other stuff going on. The pull the call of the wild or if you will with that new job uh is going to is going to come a little sooner than 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 like 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 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 you your spending power in practice is there the timing will be will be different with that uh pension when that when that comes in but like that's a real asset that's a several million dollar when it begins retirement asset. Um that changes the game and puts you well into the ability to to live a chubby if not fat fire lifestyle pretty soon if not chubby for sure now and fat in the next couple 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 the big change and now the game that if if you agree with that the game goes from how do I optimize my financial position which is what you were struggling with the house to how do I

optimize my life in the context of this and that's a a different game and it'll be that'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, stopped, moving, on, the, house because, of, that, 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 uh 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 into trouble all the time. But I I always start with a hypothesis and then I iterate. And so I was so wildly wrong in my first hypothesis cuz they came in asking about the primary residence. And we're okay, well, what'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 be able to zoom out and say, guys, like why are we optimizing for, you know, a couple of dollars here on the the ROI of what to do with this primary residence when the game is so far and away won that we can begin optimizing for something else that is of much higher scale or much more important here, which is the overall all 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, go, continue, for, at 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 many ways, they are a lot of military folks underpaid for 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 notice we didn't talk about healthcare, right? That that's not that's not a conversation in this particular case, right? It wasn't even mentioned, you know, because of the the benefits that we get. And so I think that there's a lot of really cool advantages there and 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. twothirds 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 cart 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 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 the 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 this in the course of this year.

It's fun to see it and it's a wonderful outcome and it and it's now a process to to really just enjoy and and expand on that 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/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 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/31dys. All right,, I, think, that's, enough, uh 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. 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 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.

Questions about this episode

What is discussed in "Which Path to Financial Independence Is Faster? Sell or Rent?"?

In order: 0:00 Bigger Pockets, Bigger Pockets Money, Airbnb, Mindy Jensen; 15:00 Airbnb; 25:00 Airbnb; 40:00 Bigger Pockets, Bigger Pockets Money, Monarch Money; 45:00 Bigger Pockets, Bigger Pockets Money, Mindy Jensen, Scott Trench.

What is mentioned in this BiggerPockets Money episode?

8 people, works and ideas are mentioned, including Bigger Pockets, Bigger Pockets Money, Airbnb, Mindy Jensen, Scott Trench, Rich Dad Poor Dad. Each one on this page links to its own page with every episode that mentions it.

How long is "Which Path to Financial Independence Is Faster? Sell or Rent?"?

The episode runs 45 min; the transcript is about 10,091 words in 93 timestamped sections.

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