To sell and buy another, or to rent it out?
Hey all,
Need some advice on whether to sell my home or rent it out. I’m moving in out of state in 6 months, and so I have the option of renting out my house when I move or just sell it and use any money made to buy a duplex or triplex in CT.
I bought my house for 0 money down (actually got back 1500 at close) using a physicians loan. I took an ARM loan with a fixed rate for the first 7 years. I paid 136,000 for it, and have about 11 thousand in equity in it. The house has appreciated to $143,000 (according to Zillow) however the same exact new construction houses on my street go for 157,000. So I may be able to sell it for closer to 150k. So I think after realtor fees I may be able to net $19k if I sell it. I have been house hacking it for the past two years and making 12k/year. Houses in my neighborhood rent for between 1,100 and 1,300/month, my mortgage is $700/month and I would have to pay a PM as well. It’s a new house built in 2014 so maintenance costs are minimal. So I could rent it out for 3 years and sell it before my interest rate rises, or I could sell it in 6 months when I move and use the money from the sale as a down payment on a duplex or triplex in Connecticut. I cannot get another 0 Money down physician loan unless I have 20% equity in my house, and I am a long way off from that right now. So i would have to use traditional financing which I’m not even sure if that can be used for a multifamily home. I also cannot use the physician loan for a rental, which kinda sucks because 0 down without PMI is a great deal.
Any advice on the pros vs cons of selling my primary residence vs renting it out? Does the house depreciate more if it is a rental? Would I pay higher taxes if i sell it as a rental vs primary residence? What would ya’ll do in this situation?