Hold or Cash In Charleston SC
Greetings BP,
Just wanted to see what others think about this situation.
I bough a home in 2012 in Charleston SC for $119900.00 on FHA loan with 3.5% down, and I still live in it. Since then, it has appreciated to about $190-$200 k and rent would be somewhere around $1350-1450/month if I rented it. I got it on a 30 yr note @3.25% which puts the mortgage at $726/month with PITI & PMI.
So, the great question is should I keep it a rental or sell it and take the cash to move into another home and not be house poor with a large mortgage payment?
If I kept it as rental, I would expect about $500 per month cash flow. This property would be a great rental and its in an great area that is growing fast. My only hesitation for selling (Probably a silly one to have) is that I have made money only with appreciation up to this point, I have not really had enough time for significant principle pay down which is another facet of making money in Real Estate. I feel like I should keep it for at least a few more years to realize some of that principle pay down, but I fear the implications of losing the tax free money if I sold it now as a primary residence ....
The annual cash flow would be around $6000 and considering I have $17200 into the property (due to my contributions to principle pay down and initial down payment) my CoC return would be 33% or thereabout. ROE would be about 6-7%.... (based on $93K equity)
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@Chris Armstrong FHA rules for owner occupancy