Rent or sell your existing home : How to calculate
We own a townhome and its our primary residence for the past several years. It has 14 years left on the mortgage at 1.99%.
The principal and interest is 1311 per month. Taxes+Insurance+HOA is 577 per month.
We recently bought a new single family home with 20% down and mortgage 7/1 arm @ 4.625%.
We are trying to determine if it make more sense to rent the townhome versus sell it and apply the principal to the principal of single family home mortgage.
The expected rent is 2500 per month.
Rental management expense : 1 month rent for tenant placement and 8% rent monthly fee.
Can someone help me do the math?
#3 1031 Exchanges Contributor
- Investor
- Las Vegas, NV
Has the property gone up in value? You can currently sell tax free (up to 250k gain if single 500k if married) that will become taxable. It could take 5-10 years to break even rent vs taxes. Does the Hoa allow rentals? Because you didn’t say sell and then look for a good rental it sounds like you’re considering making this a rental only because you already own it, that’s not a good reason.
Property has gone up in value.
The difference between how much we bought it, to the current value is nearly 75k.
HOA allows rental.
One reason we are considering rental - the mortgage on it is low @1.99 % with 14 years remaining.
