Evaluate this rental
I found the property analysis tool, but that seemed more geared towards deciding whether to buy an investment property. My question whether to keep a property as an investment.
My wife and I currently own a 1,850sqft 3/2/2 in Texas. We are planning to buy a newer home this spring, and I'm investigating the possibility of renting our current home out. I'd like some feedback if you folks don't mind..
Here's our information:
Market Value: $140,000-$145,000
Mortgage Balance: $81,000
Rate: 5.875%
Monthly expenses:
Mortgage: $525
Taxes: $250
Insurance: $125
Total: $900
Estimated Rent: $1,250 - $1,350
Cashflow: $350-$450
There are no major maintenance needs. HVAC is less than a year old. WH and DW are 4 years old. Range and oven are older, but work well. No plumbing or electrical issues. The only need is the roof which will probably need to be replaced in about 5 years.
As I see it, we're in excellent standing on this home. Low rate. Lots of equity. Lots of life in the appliances. Good location in a growing city with moderate (2%-3%) but very steady appreciation.
We have enough income to own both houses should this one go vacant.
Some background on us:
My wife is a liscensed (but currently inactive) realtor. Her parents and grandparents both have decades of experience in real estate sales and leasing in this market, as well as some expereince building and inspecting. I'm very handy & mechanically inclined. I have an engineering background and a good feel for managing various projects & money. I make a very good income (about $2k surplus per month) and we have little debt ($17k on two vehicles and $5k on a credit card). Our weakness is savings. Until recently, my income wasn't quite as good, we've concentrated on paying off our credit card debt, and we spent quite a bit of money on improving our home. Our savings usually hovers between $1000 and $3000.