Should I sell or rent my townhouse?

10 Replies

I'm trying to decide if we should sell or rent our house in Baltimore.

-Lived in it for 5 years as primary residence. 3.75% interest rate. Currently paying $1550/month (principle, interest, insurance, taxes). Still owe $200k. Paid $220k for it in 2010.  

-We think we could sell it for $280k. But we think we could rent it for $2k/month. If we rented it out, we think our total costs (management company, monthly payments, 3%/yr repair estimate, etc.) would average $2k in worst case scenarios and $1750 in good cases.

We're thinking about renting it out for a year while we move into an apartment. There are no homes we want to buy at this time so are hoping that we can look again in a year and potentially try to sell and buy a new one then. Is renting a bad idea in this case? The alternative is to just continue living here. 

Account Closed

What is the goal of moving out of the place and into a rental? That will play a big role in this decision. 

We want to buy a bigger house (with parking) but we need to sell our house first in order to afford the downpayment on the next house. Logistically, it's proven difficult to time it all so that it works out. We figure that renting will get us parking, potentially more houses we'd be interested in buying in a year (or 2), and then we'd have some more flexibility with the timing of selling our house and using the proceeds as the downpayment for the next house.

If you rented out your townhome, your tenant would have to follow the HOA's rules and regulations which can be an issue.

And, if you're only going to rent it out only for a year, then you'll have to go back in and fix and prep it to get it ready for sale after a renter who's probably been a bit rough with it. 

I don't really understand why you'd want to rent another apartment while renting out your place unless the difference price-wise was significant or something. 

if you don't want it anymore, sell it! Cash in the bank and no contingency will put you in the best position to buy the home you want when the opportunity arises.

Good luck!

Sell it.   The equity you get is tax free.  You can use that for the new place or purchase a rental with it.  

Originally posted by Account Closed:

I'm trying to decide if we should sell or rent our house in Baltimore.

-Lived in it for 5 years as primary residence. 3.75% interest rate. Currently paying $1550/month (principle, interest, insurance, taxes). Still owe $200k. Paid $220k for it in 2010.  

-We think we could sell it for $280k. But we think we could rent it for $2k/month. If we rented it out, we think our total costs (management company, monthly payments, 3%/yr repair estimate, etc.) would average $2k in worst case scenarios and $1750 in good cases.

We're thinking about renting it out for a year while we move into an apartment. There are no homes we want to buy at this time so are hoping that we can look again in a year and potentially try to sell and buy a new one then. Is renting a bad idea in this case? The alternative is to just continue living here. 

 If you sell now, your gains should be tax free, so consider that as well.

Originally posted by @Bryan N. :

Sell it.   The equity you get is tax free.  You can use that for the new place or purchase a rental with it.  

 Exactly!

Originally posted by Account Closed:

I'm trying to decide if we should sell or rent our house in Baltimore.

-Lived in it for 5 years as primary residence. 3.75% interest rate. Currently paying $1550/month (principle, interest, insurance, taxes). Still owe $200k. Paid $220k for it in 2010.  

-We think we could sell it for $280k. But we think we could rent it for $2k/month. If we rented it out, we think our total costs (management company, monthly payments, 3%/yr repair estimate, etc.) would average $2k in worst case scenarios and $1750 in good cases.

We're thinking about renting it out for a year while we move into an apartment. There are no homes we want to buy at this time so are hoping that we can look again in a year and potentially try to sell and buy a new one then. Is renting a bad idea in this case? The alternative is to just continue living here. 

 Agree with everyone about the sale. The only other thing I'd consider is renting via Airbnb if your house is in a good tourist area. That could dramatically increase your cash flow but isn't right for all circumstances. 

Account Closed

So you want to pack up everything, become a landlord, become a tenant, for 12 months, just because you don't "like" anything to buy right now? Seems not to be the best thought process. If you don't like anything on the market right now, I find it hard to believe you will like anything 12 months from now. If you really want to move, put your house up for sale, and then buy the next one. If you absolutely do not find something you want to buy after your house has sold, then move into a rental. Do anything else seems like a waste of time to me. 

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