Updated over 6 years ago on . Most recent reply
Rent, Sell, or Stick? (Long Post)
To start out, I want to openly admit that part of the decision I'm trying to make is based on emotion/QoL, but I just want to get the opinions of the BP community because you can tell me if I'm being crazy and making a huge mistake! Here's my situation:
Last year I decided "I'm sick of wasting money on rent, I'm going to buy a house so I'm not throwing away money anymore!" (this was before I discovered BP). So, I moved out of my downtown apartment, where I was paying $1,400/month in rent and bought a house about 20 minutes outside of town with 3.5% down using an FHA loan. It's in a good neighborhood/area outside of Nashville that I expect to grow quite a bit (speculation, I know but worth mentioning nonetheless).
I've been in the house for a little over the year now, but I find myself REALLY missing living downtown for quite a few reasons (convenience, saved time, yardwork, etc etc), so I'm trying to see if it can make financial sense at all for me to make it happen or if I just need to suck it up and stick where I am for a while.
I ran some numbers, and here's where I landed (Please let me know if I'm missing something):
House Expenses:
Mortgage/Interest/PMI/Insurance/Taxes = $1,370/mo
Maintenance (Assuming 1% per year) = $181/mo
If I were to rent it out, presumably the tenants would pay the utilities, which come to an average of about $187/mo (heat, water, electric)
I expect I could get $1,600-1,700/mo in rent.
Obviously if we were talking about a pure rental investment, the numbers don't really add up, but since I already own it, I'm trying to determine if it makes sense so that I can move pack to the place I want to live. Another factor (which I include in my summary tables below) is that I would eliminate my commute (20 miles each day, which I estimate comes to about $71.25 per month).
I don't think selling would make sense at this point, since the 6% real estate fees would take away ALL of the equity I've built on the house.
Now, if I look at it strictly from a financial perspective, it probably makes the most sense to stay in the house, but I find myself wanting to pull the trigger anyway. Tell me if I'm being an idiot! Here is my breakdown for each scenario.
| Stay in House | |
| Mortgage/PMI/Insurance/Taxes | $1,370.46 |
| Maintenance | $181.25 |
| Utilities | $187.42 |
| Commute | $71.25 |
| Rent (from my roommate) | -$700.00 |
| Net Cost Per Month | $1,110.38 |
| Rent House | Assuming I get a 2 BR Apt |
| Mortgage/PMI/Insurance/Taxes | $1,370.46 |
| Maintenance | $181.25 |
| Commute | $0.00 |
| Landlord Insurance | $27.25 |
| House Rent | -$1,700.00 |
| House Net | -$121.04 |
| Apt. Utilities | $30.00 |
| Apt. Rent (split with roommate) | $1,100.00 |
| Net Cost per Month | $1,008.96 |
| Rent House | Assuming I get a 1 BR Apt |
| Mortgage/PMI/Insurance/Taxes | $1,370.46 |
| Maintenance | $181.25 |
| Commute | $0.00 |
| Landlord Insurance | $27.25 |
| House Rent | -$1,700.00 |
| House Net | -$121.04 |
| Apt. Utilities | $47.00 |
| Apt. Rent | $1,500.00 |
| Net Cost Per Month | $1,425.96 |
I'm a crazy over-analyzer but I'm really struggling with this one. What do you guys think? And thanks again for taking the time to read this long post!