Rent or Sell Condo (our first home)

[Adam Moore]

Hi All - my wife and I are moving from Chicago to Ohio and are trying to decide whether to rent out our 2bed/1bath condo or sell it.  We hope the home we buy in Ohio will be our home for the next 20+ years.  We do not need the cash for a down payment on another house, though it would provide us a little more flexibility if we wanted to put more than 20% down to get a more comfortable monthly payment or if we wanted to do any renovations.  We would attempt to DIY landlord - we have lived here for over a decade and have used and know many maintenance/service providers.  My job will still be based here so I will be back in town ~4-8 times a year, for what that's worth.  Our condo is in a desirable location in the Lakeview neighborhood near public transit.  I do not think finding good tenants will be a problem now or in the future.  I do not anticipate any near-term major repairs/upgrades, though the building is quite old (>100 years).  All major appliances, AC unit, water heater are <5 years old.  All new windows installed last year.

Relevant numbers:

Purchase price: $390,000 @ 3.00% rate, 20% down

Remaining mortgage: $278,000

Estimated sale price: $475k-$500k (I have spoken to a realtor)

Estimate rental rate: $3000-$3200/month (I have spoken to a rental specialist)

Current monthly payment (mortgage, insurance, tax, HOA): $2,200

Happy to provide any other info that might be useful.  Thanks in advance for any thoughts!

[Joe Homs]

@Adam Moore Let do some calculations.

PP $390K

SP $500K

CC $30K Closing costs, commissions, etc.

Profit $80K Tax free since you can use the 121 Exclusion.

Rental Income

Income $3200

Expenses $2200

Cash flow $1000 or $12K a year (Very good and with the new Big Beautiful Bill, lots of tax write offs)

You would break even in 6.6 years if nothing else happens to the unit.  Do you want $80K in your pocket now or wait 6.6 years?  How much appreciation are you expecting where you live?  If this was in California I would keep it, but maybe not in Chicago?  Are you able to double your money in 10 years which is the rule.  If not then maybe keep it and let your tenants pay off the low rate mortgage for you.

Good Investing...