Birmingham, AL · Member since 2014 · 875 posts · 947 votes
7y
@Jose J Nazario a lot more information would help the BP community really weigh in on this, but my one piece of general advice is to put the work in (and if you can do it yourself to save $$$, so much the better) to really update the place. If you've replaced flooring and roofing recently (or bought it within the last few years and those things were new), great. What about other big-ticket items? HVAC, water heater, etc. How old are they and what shape are they in? Rentals take a lot more wear and tear than primary homes because tenants are less likely to put in the labor to fix things up when they break, or to keep things maintained on their own etc - if something needs fixing, you might not hear about it for a while unless it's really an issue in the tenant's day to day life. Basically, the better shape it's in when you rent it, and more on top of maintenance calls out you are (never defer maintenance), the lower your costs will be in the long run.
Birmingham, AL · Member since 2014 · 875 posts · 947 votes
7y
For a more detailed answer from me and others, maybe provide some of the following info:
Year of purchase:
Amount of Equity:
Est. Rent Rate:
Year of Most Recent Update:
Will you hire a PM?
What are the insurance and tax rates for this property?
What are your actual loan payments?
If the numbers don't add up and this was your primary for at least 2 out of the past five years, you could sell it and take any gain (up to $250k if you're single, $500k if married filing jointly) tax-free. If it doesn't really make sense as a rental, you may find that selling and using the proceeds to invest elsewhere would be a better solution.
The house was built in 2012 and I purchased the same year with a VA loan. I did move out of the house in May of 2016. It has about 60k$ of equity. I got for about 210k$ and its valued now at about 270k$. My mortgage payment is 1595$ and its rented for 1795$ but after expenses only 20$ left. 10% PM fee.
Rental Property Investor · NC · Member since 2018 · 776 posts · 776 votes
7y
Assuming the home is updated and in good condition. Make sure the rent is in-line with the market. Seems like you bought your dream house and not a good cash flow rental property. Some houses/areas make better rentals then others.
What is your strategy with this home? Are you looking to move back in eventually. $20 a month is not sufficient for repairs over the life of the mortgage. So if you want to hold onto the property, just know you will be paying out of pocket to replace things.