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Sell for $80k or rent for 1k
My current residence has a mortgage that costs ~1,100 per month, I can rent the property for a minimum of 2,000 possibly 2,200. Should I rent this out and get a new property or should I sell and cash out ~80-90k?
#5 All Forums Contributor
What other costs do you have associated with the property (property taxes, insurance, etc)? Are there any major repairs coming up? and if you sold, what would you do with the money? Your mortgage probably has low interest rates, so if the numbers work, I'd rent it out.
Quote from @Theresa Harris:
What other costs do you have associated with the property (property taxes, insurance, etc)? Are there any major repairs coming up? and if you sold, what would you do with the money? Your mortgage probably has low interest rates, so if the numbers work, I'd rent it out.
Taxes and insurance are accounted for in the mortgage costs since I escrow them. There are no major repairs needed although I probably should renovate the bathroom. The roof is about 10 years old and the furnace is about 7 years old. The big plans for us is to move into something with a better layout, our market is going crazy right now so we would need to buy in the 400-500k range, we owe about 170 on our current mortgage and we would list at about 270.
#5 All Forums Contributor
Quote from @Marcus Gaethke:
Quote from @Theresa Harris:
What other costs do you have associated with the property (property taxes, insurance, etc)? Are there any major repairs coming up? and if you sold, what would you do with the money? Your mortgage probably has low interest rates, so if the numbers work, I'd rent it out.
Taxes and insurance are accounted for in the mortgage costs since I escrow them. There are no major repairs needed although I probably should renovate the bathroom. The roof is about 10 years old and the furnace is about 7 years old. The big plans for us is to move into something with a better layout, our market is going crazy right now so we would need to buy in the 400-500k range, we owe about 170 on our current mortgage and we would list at about 270.
Then I'd rent it out. I've never heard of home insurance being part of the payment (mortgage insurance, yes).
Quote from @Theresa Harris:It's not uncommon here. It's just escrowed by your mortgage servicer like you tax payment. It is usually an option you can choose, but I had one lender require it in order to get the loan.Then I'd rent it out. I've never heard of home insurance being part of the payment (mortgage insurance, yes).
Quote from @Marcus Gaethke:
My current residence has a mortgage that costs ~1,100 per month, I can rent the property for a minimum of 2,000 possibly 2,200. Should I rent this out and get a new property or should I sell and cash out ~80-90k?
I recommend you learn how to properly evaluate cashflow. A good investment accounts for mortgage, taxes, insurance, vacancy, ordinary maintenance, capex, etc. You pay the PITI, you set some aside for the others, and what is left over is cash flow. If you only pay PITI and then count everything else as cash flow, you are setting yourself up for trouble.
Here's a guide that describes what good cash flow looks like and how to analyze a property. https://www.biggerpockets.com/...
Then you also should have a plan. Why are you investing? What are you trying to achieve? If you know where you are and where you want to go, then it's easier to make decisions that help you get where you want to go. Selling may be the right answer, but it can also be the wrong answer. Which option is most likely to help you achieve your goals?
#3 Land & New Construction Contributor
- Realtor
- Columbus Ohio, Cleveland Ohio
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#3 Land & New Construction Contributor
- Realtor
- Columbus Ohio, Cleveland Ohio
I think its definitely worth running the numbers for renting. Like Nathan said, make sure you're accounting for all the expenses. I see you have a pro account so you can use the BP rental property calculator. It will only be as accurate as you are when filling boxes. In this market with the interest rate you probably have on it, I'd definitely shoot to rent it
Hey Marcus! Nice dilemma to have 😄
So basically, you've got two options: rent or sell. If you rent it out, you'll be cash flowin' $900-$1100 per month, which sounds pretty sweet. But if you sell, you'll have a solid $80-90k to reinvest elsewhere.
In a nutshell, it comes down to your goals and strategy. Are you looking to build passive income or are you more focused on capital gains? Lmk what your long-term game plan is and we can discuss this further!
Also, have you considered factors like property management, vacancies, and maintenance costs if you choose to rent? Would love to hear your thoughts on that.