Should I sell or rent my house?
September 4, 2012 5:16 PM Subscribe
Should I sell or rent my house when I move to a different part of town? I would just about break even in either situation.
posted by ethidda to work & money (12 answers total) 3 users marked this as a favorite
I bought a house about a year ago, and am finishing up the refinancing process (for 20% less per month) this week. It's a cute house in a nice neighborhood. I made some updates, but the kitchen and bathroom are still outdated, and the house is not exactly level. The house also has two small bedrooms, with an additional attic bedroom, and only one bathroom. It's a bit big for my boyfriend and me (though only 1150 sq ft) but too small to rent out a room to anybody else.
I'd considered renovations, and taking out a large loan to make it a duplex (income property). But the crux of it is: I don't really want to live in this part of Seattle anymore. So I would like to move sometime in the next year. I'm looking at moving into an apartment rental downtown, so I won't need to take out a second mortgage. And at that time, as I see it, I have two choices: renting out the house or selling it.
Renting out the house's biggest problem is of course, bad tenants. I should be able to break even or even make a hundred or two a month. I would consider remodeling the kitchen to get a higher rent, though I would rather not. I have a year's worth of payments in savings in case of bad tenant or needing to fix up the house. And I will be in town to take care of landlord business. So I'm tempted to do this.
Selling it would obviously lessen my financial obligations, thus giving me more financial freedom. However, after agent fees and other fees, I would have basically zero dollars after selling the house. (I bought the house with only 3.5% down.) It is an old house (so it will need repair/maintenance/updating sooner or later), so getting rid of it completely is not necessarily a bad option.
I am also considering hiring a rental company and possibly taking a small loss.
I don't make super lots of money, but it's still a decent number. So I'm not quite sure what the tax implications are. (Since this is not happening immediately, I haven't spoken with a CPA about it yet.)
I'm vaguely considering going into being a landlord in the long term and I also wonder if having a SFH would be helpful to that at all. (Or if I should just try again later with an n-plex.)
Has anyone else on MF been in a similar situation? What did you do? What would you recommend I do (or the factors that I should look at)?