Moving out of state, to sell or to rent out

[Megan Johnson]

My husband and I (both early thirties) have owned our 3 bed / 2.5 bath condo in Charlotte for 5 years - 3.5% IR with 20% down on 310k. We owe $222k and could sell for ~ $425-445k. PITI is $1800 including our HOA. Utilities + paying off hvac at 0% int puts us all in at $2200 / month.

We like it enough, especially at the price, but it’s certainly not the dream home and could use cosmetic repairs. Lately we’ve noticed water damage, drywall cracks, and other issues that I worry may bite us later. We are not sure where we want to be longterm but are moving closer to family. For that reason, we’re planning on renting vs buying at our new location. 

We could rent it for $2500/2600 according to local realtor advice and data. We would pay a property manager 10%, as we are moving out of state and have no desire to be landlords. 

Our best case monthly margins - with the hvac payment and PM fees - are $340 at $2600 rent and no repairs. We would be hanging onto it more for its future potential. but ideally I’d rather have a townhome or single family over condo. 

we’ve considered selling and setting the cash aside for when we’re ready to buy again, accepting that we’re kissing that interest rate goodbye. My concerns with renting - low margins and the headache of prepping the place to sell or move back into after renters have torn through it + potentially being responsible for a mortgage AND my rent if things don’t go to plan. 

Trying not to be short-sided here, as I could see it paying off in the long run and know we’re fortunate to own in a growing city. However, it hasn’t grown at the rate other properties have and not sure it’s where we want to be. 

Would love advice on whether to sell or rent out in this scenario 

[Cole Bossert]

I’d sell as well. Like @Caleb Brown mentioned, $200K in equity could likely be put to better use elsewhere. The margins seem a bit tight, especially if vacancy and maintenance weren't fully factored in. Plus, if you're not really excited about this property and would prefer a townhome or SFH, it's worth exploring deals that align better with your long-term goals.