Becoming a landlord

7 Replies

I currently own my own home free and clear (150k asset) it's close to town and within walking distance of an elementary school, and a golf course. I'm looking for advice as I may have a job opportunity in another state (5 hours away) and the market is 10x better. My question is do I sell or rent? With the new position and move I will be in a much better place to build wealth.

Hi Aaron,

Well you have to run the numbers for both sides to really see and then roll the dice. I once did a cash out refi thinking I was going to be able to quickly turn that money into another property and struggled for 8 months to find anything worth while. That cost me thousands in free and clear rental income because I thought I could find something so fast.

Be careful not to over estimate your ability to move, learn the market and find a deal that makes sense in a short amount of time. 

Allen

What do you mean under "market is 10x better"?

I would sell and buy local. Unless there is a possibility you may want to move back,

Think about the tax consequences as well. If there is a gain you might want to lock that in tax free and sell now. You can use the cash to buy something where you live next and then manage a rental that is close to home.

Like others mentioned you need to run the numbers, make sure being a landlord is for you (read plenty of books), think about selling, financing options, or possibly renting the paid for home for the 1 year 1 day and then look to 1031 exchange into a investment property closer to where you are moving to.  

In your initial post you mention that you "will be in a much better place" so you have kinda answered the question that an investment property in the area you're moving to is the best option.

HELOC or Refinance, take the equity out, and tent the property.

Try not to get swayed too much on your decision to be a landlord just because you happen to own the property. Ask yourself this, would you buy this property (for the price your could net) to use as a rental? If the answer is no, sell it and move on.....

(There may be other factors)

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

Lock We hate spam just as much as you

Join the Largest Real Estate Investing Community

Basic membership is free, forever.

By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.