Sell or Rent

8 Replies

Should I rent out my current home for a cash flow of ~$300 or sell the home for the equity and use that for 2 properties if possible?

That is a tough question...

If you sell you'll have to pay all those closing costs including Realtor fees and seller concessions.

If you do sell and can acquire two new properties they probably won't cash flow nearly as well. I would do a little market research and see what type of deals are available and what it would cost to get into each property. You may only cash-flow a $100 or less a door. But you could still end up ahead with the combination of appreciation and principal pay down. Plus if you do any work to the property then you may get some forced appreciation out of it. 

The other aspect you need to consider is do you think the bank would lend to you two new properties at this point in time in your life? Is your credit still good? Do you still have good income?

There is a lot to think about. GOOD LUCK!

Thanks for the feedback. 

I will have to go nontraditional lending if I keep the property and purchase another rental property as a owner/occupant and/or purchase two new ones at 50% the cost of current house. Credit is excellent, income is decent, however student loans makes my debt/income not look so favorable. 

Is there any reason why you can't get a heloc on the house as your primary residence. Then turn it into a rental and get the $300/cash flow and still have the cash to buy 2 more? 

There are some lenders that are going up to 90% on the heloc's for primary residences. That would be about the same amount of money you'd get if you sold (have to figure 10% in closing costs and some minor repairs).  

Doing it this way though, you get the capital you need plus you keep the cash flow. Now technically, the cash flow will be less since you'll be making payments on the heloc when you pull that money out.

The only thing I'm not sure is what your loan qualification status is. You mentioned your dti was too high. But I have to think if you can get financing on the two properties, you would be able to get a heloc as well.

But maybe there's something to this I just don't understand.


A heloc is an option that I have considered. At 90% would put me at ~$30,000. My dti is 53% which includes a home mortgage of $135k. Adding another property will obviously increase my dti. Properties i am looking range ~$80000 to $100000. I would live in the new property for a minimum of 1 yr in either situation. Will lenders approve at such a high dti?

53% DTI will mean you will get denied as you can't include the rent unless you've been a landlord for 2 years.

Consider selling if you can lock in a significant tax-free gain.  That won't happen very often! If you have that and rent, sell within 3 years of moving to maintain it.  If staying in the area and taxes aren't a consideration, renting it out may be a good option.  

@William Campos  Are you sitting on  a large amount of equity?  Are you staying local to the house? 


I would sell in 2 years if I hold on to it. I have about $35k-$40k in equity. I will me locating out of state, so it looks like i'm leaning towards selling. 

Thanks Scott W, wasn't aware of that. 

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