Sell our House or Rent it out - with numbers

Sell our House or Rent it out - with numbers

Investor · Venice, FL · Member since 2017 · 11 posts · 1 vote

Hey BP, would love your advice!

My wife and I along with our 19mo old are looking to move. We currently live in Waunakee (right outside Madison, WI) and looking to move to Venice, FL to be close to retired grandparents. 

I am a Realtor so this will play into the figures below. 

We currently live in a very sought after town with top 5 school district in the entire state and live in an extremely sought after neighborhood. I only mention this to lay the groundwork for our decision. 

Bought 3 years ago for $340,000, put 10% down, owe $291,000 and house valued at $415,000 right now if we sold (did many updates, though still needs more)

If we sell now, obviously we would save about $12,000 in listing fees because of my Realtor job. 

If we rent it out, there are about 3 rentals in our neighborhood and all rent for avg of $2850. We have a CEO of a company wanting to rent our place to get his children into our school district and wants our neighborhood as his daughters already have friends here. Possibility he would buy it but 80/20 he rents. 

Our mortgage, insurance, taxes comes to $2,050 a month. 

Obviously we have lots of equity in the place and if we rent we'd be cash flowing pretty nicely. Never been a landlord yet, and then to do so long distance would be a new challenge, and one I would be ok taking on. We have a cabin up north of here so I would be coming up here frequently from FL to go there and would do updates, and check on the place when needed. 

Any opinions from people here. I value everyone's thoughts, hence why I posted figures for a more precise answer. 

Im caught up on listing now and saving $12,000 in fee's and taking the money and running. Versus renting it and maybe selling it in a few years and paying more in fees as I would not be a local Realtor anymore. I did NOT account for appreciation as that would just be a cherry on top. 

thank you all!

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Investor · Asheville, NC · Member since 2011 · 833 posts · 499 votes
6y

Interesting, we faced a very similar dilemma and after some soul searching decided to keep the home as a rental, put down less on the home we were purchasing and deal with the higher mortgage payment.

We've been fortunate to experience significant appreciation, and as rates have lowered, we're now refinancing our primary and our mortgage will be roughly what it would have been had we sold the rental and put 20% down.

Obviously we've benefitted from favorable trade winds over the last 18 months, but I strongly recommend keeping it. The equity paydown, cash flow and future potential to leverage it into more assets are all compelling reasons to make some short term sacrifices. (Just my opinion)

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  • Investor · Asheville, NC · Member since 2011 · 833 posts · 499 votes
    6y

    Hey @Greg Eftax - we're in a similar situation with an A class rental with nice equity.

    I guess the real question is what would you do with the equity? Your return on equity as a rental wont be great, but, there's something to be said for owning in a high demand, appreciating area with high quality tenants.

    I own or have owned A, B and C class properties and A's come with the least headaches by far. 

    We've held onto ours because the area is developing like crazy and developers and other investors are basically forcing appreciation on our home. It cash flows decently and I don't have a great place for the equity at the moment.

    Hope that's helpful and a future welcome to Florida!

  • Investor · Venice, FL · Member since 2017 · 11 posts · 1 vote
    6y
    Originally posted by @Andrew Davis:

    Hey @Greg Eftax - we're in a similar situation with an A class rental with nice equity.

    I guess the real question is what would you do with the equity? Your return on equity as a rental wont be great, but, there's something to be said for owning in a high demand, appreciating area with high quality tenants.

    I own or have owned A, B and C class properties and A's come with the least headaches by far. 

    We've held onto ours because the area is developing like crazy and developers and other investors are basically forcing appreciation on our home. It cash flows decently and I don't have a great place for the equity at the moment.

    Hope that's helpful and a future welcome to Florida!


    Correct, I feel that this home would hopefully attract "easy" tenants and less hassle. With the neighborhood and school walking distance, homes appreciate very well, especially since there is no more empty lots to build on. 

    To answer your question, we were initially just going to cash out and take the equity and put a huge downpayment on our PR in FL to lower our debt obligation as my wife is keeping her job and I'd have to start over, so a lower monthly payment would be nice. 

    Right now, a known is home value, and very little transaction fees. Unknown in a year+ is Property value, Cap Ex but things can be estimated

  • Investor · Asheville, NC · Member since 2011 · 833 posts · 499 votes
    6y

    Interesting, we faced a very similar dilemma and after some soul searching decided to keep the home as a rental, put down less on the home we were purchasing and deal with the higher mortgage payment.

    We've been fortunate to experience significant appreciation, and as rates have lowered, we're now refinancing our primary and our mortgage will be roughly what it would have been had we sold the rental and put 20% down.

    Obviously we've benefitted from favorable trade winds over the last 18 months, but I strongly recommend keeping it. The equity paydown, cash flow and future potential to leverage it into more assets are all compelling reasons to make some short term sacrifices. (Just my opinion)

  • Property Manager · Sarasota Bradenton Venice North Port, FL · Member since 2018 · 13 posts · 5 votes
    6y

    As a real estate professional yourself, wondering why you wouldn’t turn property over to professional management? Are you that strapped for cash? If you are that strapped, perhaps selling would be best.


  • Investor · Venice, FL · Member since 2017 · 11 posts · 1 vote
    6y

    Couple reasons:

    1) Being an A class rental, I feel that it won't need as much attention from me

    2) I have only heard horror stories about PM's and who will care about your property more, the owner or a PM?

    3) I plan to be back in the area multiple times per year to see family, wife's job is HQ'd here and she will be back a few times per year, and I plan to be up many times to sped time at our cabin and will stop by to check on things. 

    4) and maybe the biggest reason is I am a control freak at somethings and prefer to be more hands on than passive

    might not be the best reasonings but thats what comes to mind

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