Specific question:
Our question is about our former home. The house was purchased in 1997 for $149,500. We have put about $20,000 capital improvements into the property over the 16 years that we lived there. We could probably sell the house for $380,000, before expenses. Comparable rents in our area are $2,000 per month, and vacancy is low.
On the one hand, our desire to avoid hoarding high maintenance assets motivates us sell the property. Selling would reduce our hassle factor significantly, since we don't have any experience with real estate transactions and we wouldnt have to worry about finding good renters or maintaining the property or dealing with evictions. In addition, although price appreciation on real estate assets is typically above the national average in our area, price appreciation is not guaranteed. We keep discussing the opportunity cost of investing in our former residence, versus just investing in a REIT index fund.
On the other hand, our fixed costs for the property are low and the property is centrally located close to many employment opportunities and various universities. It would have a positive carry we likely wouldnt lose money on the transaction unless the renters totally trashed the house. We would likely have the renters put the natural gas and electricity in their name, maybe even the water bill. We could even spring for a property management company to help if we lacked confidence in our abilities to manage the property. Keeping the property is a good insurance policy for the future when are we ever going to get such a low tax base again? If we were to sell and repurchase the same house, the tax base would be over double due to property appreciation. If something happens to us, we could always return to our very affordable former residence.
What are we missing? What analysis would you do to help us decide whether to keep/rent or to sell?