Hello Everyone,
I've been a long time reader, and wanted to get the thoughts and input from the group on a decision I've got rapidly approaching. I was just offered a new position near Memphis, TN, so I'm moving within 3-6 weeks.
Situation:
-Currently own home in central FL, along I-4 corridor
-Original mortgage $86k
-Currently owe $82.5k
-Mortgage payments = $680/month through the rest of the year, $750 thereafter
-$50k tax exemption would not be renewable if I move, thus the higher payments
Option 1: Sell
-Realtor approximates $110k conservative selling price, $120k stretch
-Would after fees, taxes, etc would walk away with ~$20k off $110k sale price
Option 2: Rent
-Have two friends that are discussing renting house out from me
-Would still have them sign contract
-Rent would be slightly discounted off market rate at $900/month
-They would be responsible for 'normal' landlord duties
-basic repairs, lawn, etc
-I would be responsible for major repairs
-Assuming this would roll to be slightly cash flow positive before tax considerations
Thoughts/Considerations
-I'm not necessarily concerned about the guys I'd be renting to, but I am worried about the what would happen after they leave
-Moving 3 states away
-Real estate along the I-4 corridor has been booming lately (~+25% YOY)
-Zillow (FWIW) estimates 6% increase in home prices in my area over next year
-Already pre-approved for another mortgage while holding current one, so sale is not a requirement for my move
Question: I understand that a lot of emotion/personal preference comes into play with these decisions, but from a pure financial standpoint, should I rent or sell?
Inputting Data from Sticky:
Market Value: $110k
Original Purchase price: $88k with 6% back
Original Mortgage Amount: $86k
Interest Rate: 3.125%
Mortgage Term: 30 years
Term remaining: 28 years
Amount remaining on mortgage: $82.5k
Gross Rents: $900/mont ($10,800 annual)
Principal and Interest (the P&I of your PITI - should match with the above info): $375/month
Taxes and Insurance (the T&I of your PITI): $305/month until December, $380 thereafter
HOA costs: $0
Deferred maintenance notes: may need some electrical work in next few years, will need a new roof within 5-6 years
Anything else special or unique in regards to the numbers of the property (not the property itself; things such as city assessments, back taxes, special costs due to unique features of the property, etc. etc.): see above