Rent or sell my House

[Agustin C.]

Hello BP community,

I will be purchasing a new home in the next year or so and I havent decided whether or not I should sell or lease my house in Houston. 

My PITI is currently around $1200 and rents in my area are around 1400-1500. If I take vacancy, management fee (likely myself), and capital exp reserves I would not be positively cash flowing.

If I sell I will pretty much be breaking even. My property has appreciated, but the appreciation will cover the money I spent on the purchase plus all the cost of selling. 

What say you BP? 

[Tony Castronovo]

I agree with @Louis Craig that you can cash flow if you put more into the deal...so that alone should not be your sole trigger. I try to balance cash flow with money left in the deal (COCR). If I put more into the deal my cash flow increases but my COCR decreases. Set your thresholds and consider working within both limits.

Have you considered owner financing? You may be able to carry back a note and get a better return.

If you keep it can you make it a more efficient machine? Find ways to minimize expenses. But also consider value adds, like adding a washer/dryer and charging a monthly fee. Also, I charge separate pet fees and recently had a borderline property where the pet fees made it in the black. (Note: rented to a veterinarian who is a responsible pet owner willing to pay a premium).