Should we rent out or sell our property?

Question

We have a 3 bed 2 bath (1295 sq ft .25 acre) module home 40 mins south of Seattle that we have updated. The neighborhood is being built up with new homes.

We owe $80k and and sold comps are around $250k to $280k.  We would like advice on whether we should rent it out and pull the equity for other rentals or sell and take profits to Arizona where we plan on moving and investing.

Account Closed · Answer

@Vincent Molina I would sell and take the $150k (ish) in profit and leverage it into a $800k multi family. You will make better cashflow and build a lot more wealth than holding a SFR

Stephanie Martinson · Answer

It really does come down to what will you need and what your goals are, 1) the capital to potentially invest in something else nearby or 2) the monthly cash flow?  That's a lot of equity to walk away with, and it's probably a good time to sell in Seattle.

I will say, it is a lot easier to manage single family rentals in the same town or a town that is close by.  If it is just a single family home, you will probably lose a lot of monthly income with a property management company.

Vincent Molina · Answer

@Nicholas Sheridan, Jr.

Yes would definitely get a property mgmt team. Thank you

Samuel Bavido · Answer

You've got to think about your priorities and goals. The good news is, you have a lot of good choices.

Where are you in your investing career? How much education have you had? Do you feel confident in your ability to invest 150k (plus) wisely? It may be better to do something on a smaller scale for a couple years before selling that home. Or maybe you are well educated and seasoned, and this is the boost you need to go on to bigger and better things.

What can you get for rent? If you re-finance (no cash out) to get that 80k on a 30 year note, you'll have very low payments. Then you can get a line of credit on the rest of the equity and BRRRR for the rest of your life.

Do you have family in Seattle, or any reason to travel there regularly? As long as you are sure to do things like property inspections and meeting with the tenant or management, you can write those trips off. That could be a pretty big deal for you.

What's your view on the immediate future of both the market for this house, and the part of Arizona where you will move? Most people are expecting a downturn in the market in the next 18 months; if you sell now and hold that cash for a while, you may find your buying power increased incredibly.

Nicholas Sheridan, Jr. · Answer

@Vincent Molina One big thing to consider is that you need to have a good property manager/team in place for when issues come up (which they will).

Ben Buckley · Answer

What’s your goal in life? Are you comfortable with living in another state while renting it? How much can it rent for?