We are moving from Fort Worth to the Houston area. I would like to sell our house, but we have a nice 3.5% on it, and that is difficult to leave. It has appreciated quite a bit from when we bought it, but I don't necessarily see it continuing to appreciate. We could probably rent it for right what we pay per month.
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Sell or Rent?
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Last: 7 mo ago by Red Pear Jack
sell. After commissions and maintenance, it sounds like you'll be upside down.mAgnoliAg said:
We are moving from Fort Worth to the Houston area. I would like to sell our house, but we have a nice 3.5% on it, and that is difficult to leave. It has appreciated quite a bit from when we bought it, but I don't necessarily see it continuing to appreciate. We could probably rent it for right what we pay per month.
It is a 20 year not 30 if that matters at all?
You can have someone run the numbers, but if you're barely covering debt service, taxes and insurance with the rent, you're one roof or HVAC replacement away from blowing up any potential profit.
Don't think it would be worth the hassle.
Don't think it would be worth the hassle.
Sell it, take the equity and reduce the amount of the new higher rate mortgage you'll be getting. I personally wouldn't want to own a rental around the corner much less one several hours away. As Diggity mentioned if you don't have a delta between rental and debt service that's potentially a real issue.
What's the house's market value and what is projected monthly gross rent? Start here.
Why do you say it won't be appreciating anymore?
I would not keep it as a rental and assume appreciation. But if it would cash flow well and have modest appreciation, then it may be worth keeping.
Like the above said, what is the likely rent that you could get for it? And what are the monthly expenses?
We moved out of our primary home about five years ago and have been renting it ever since. It has appreciated a good amount and the cash flow each month is fair. I have a lot of equity in it, but insurance rates are starting to eat into my cash flow.
I would not keep it as a rental and assume appreciation. But if it would cash flow well and have modest appreciation, then it may be worth keeping.
Like the above said, what is the likely rent that you could get for it? And what are the monthly expenses?
We moved out of our primary home about five years ago and have been renting it ever since. It has appreciated a good amount and the cash flow each month is fair. I have a lot of equity in it, but insurance rates are starting to eat into my cash flow.
Aggiemike96 said:
What's the house's market value and what is projected monthly gross rent? Start here.
Not sure what actual appraised market value is. Taxable went up to $481 then back down to low $400s last year. Which also brings up the question of should we get it appraised before listing if we do sell? Across the street on 5.5x smaller lot, but 600 sq ft bigger and with pool is listed for $518. We have 900 sq ft outdoor living area, but no pool, and both houses are similar update wise. I would guess we would be around the $450-$475 mark. Rent would probably be $3-3.2k. Insurance has gone through the roof the past 2 years and hiked our payment all the way up to $2900 (property tax included).
you'll want to figure out how much your property tax hit will be when you lose the homestead exemption.
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We can do a CMA so you can get an idea of what it's worth.
If you have some equity and you're barely breaking even if you rent then it's likely best to sell. You have to ask yourself what happens if the AC breaks down? Hail storm swings by? Water heater craps out? These are real unaccounted cash outflows.
What is the opportunity cost of that cash, can you get better returns in the market?
Also, your property won't be 100% leased all the time. Are you factoring vacancy in there?
All of this is market specific. Happy to provide some data to make the decision easier. I've underwritten over $5Bn worth of real estate investments and we can help with the sale as well as the purchase.
If you have some equity and you're barely breaking even if you rent then it's likely best to sell. You have to ask yourself what happens if the AC breaks down? Hail storm swings by? Water heater craps out? These are real unaccounted cash outflows.
What is the opportunity cost of that cash, can you get better returns in the market?
Also, your property won't be 100% leased all the time. Are you factoring vacancy in there?
All of this is market specific. Happy to provide some data to make the decision easier. I've underwritten over $5Bn worth of real estate investments and we can help with the sale as well as the purchase.
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