Author Topic: Moving: Rent Out our House or Sell?  (Read 395 times)

tyrannostache

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Moving: Rent Out our House or Sell?
« on: October 28, 2019, 11:35:50 AM »
I need help sorting through our options. Spouse is about to take a job that will require us to move to a nearby town. We both love the town and I can keep my current job, so no problems there. New town has a higher COL than current town, but the job will be an income bump for him and give him an entry into a group and industry that is exactly where he wants to be. Since the job is a 2-year term (likely to renew, but no guarantee), we probably won't be buying for some time.

We need help deciding what to do with our current house. We will be renting when we get to New Town, probably 1400-1800/month (could go lower, but we have 2 kids and are prioritizing for a short commute and proximity to schools/services).

Current home
Bought in 2016. Paid $205,000 Mortgage: $150,000 (monthly payments ~1100)

Comparative recent sales: 255,000-290,000. I'd place our home on the higher end of that due to our remodel. Based on what I'm seeing, we could sell pretty much instantly if we listed at 275. There seems to be a lot of pent-up demand for updated homes under 300K in our neighborhood.

Potential rental rate for current home: 1400-1500
Vacancy rates about 3.5%


How would you all break down the cost/benefit of keeping the house vs. selling?

Not sure whether we should  factor this in: home values in our current town have been rising at an increasing pace for the last couple of years (they've been rising much more rapidly in New Town, which makes me a little nervous). There are some factors that lead me to believe they'll continue to rise--we're in a growing area of the mountain west, located between two larger towns that have been growing at an incredibly rapid rate, and where housing prices having been rising dramatically. It has been a little slower in our town, but we're definitely seeing an effect.

There's some security in the idea that our house could still be there for us at 1100/month if we need it, but I'm not sure that security is worth it.






Papa bear

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Moving: Rent Out our House or Sell?
« Reply #1 on: October 28, 2019, 11:57:03 AM »
First, post this in real estate and landlording, thatís where most of these are.

Second, the numbers on your house tell us that it is worth much more as a living unit / home than as a rental / investment property.  In fact, it makes an absolutely terrible rental property.

From purely a financial standpoint, you get this house ready to list.  From an emotional standpoint, are you going to move back in here in 2-3 years?  Are you willing to subsidize someone elseís living by renting out this house so that you could possibly move back into it someday?

Appreciation expectations are a fools game.  Donít count on it.




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dandarc

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Re: Moving: Rent Out our House or Sell?
« Reply #2 on: October 28, 2019, 12:20:59 PM »
+1 to what papa bear said. Do you think you'll want to move in to this exact house in the short-ish term? That would be the reason to keep it.

We just did a temporary 18 month assignment on the other side of the country. We rented out our house and have moved back in to it. Numbers didn't make sense as a rental, but the rent allowed us to keep the house without feeling like it was a complete throwing away of a ton of money. If I had it over again, I might have just sold it when we left, but it has been kind of nice to have not had "find a place to live" on the checklist for this move. We had a pretty concrete and short timeline, as well as a friend in need of housing right when we wanted to leave, so we decided this move was OK for us.

tyrannostache

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Re: Moving: Rent Out our House or Sell?
« Reply #3 on: October 28, 2019, 01:19:51 PM »
Thanks, y'all. That makes sense. (And, clearly, I put this in the wrong sub!)

That's a good way to think about it. We would never, ever buy this home as a rental or investment property, so it doesn't make sense to hold on to it in that regard.

I think this whole process is slowly shifting our perspective on the house. Before this opportunity came up, we were preparing for this house and this town to be our "until the kids move out" home. Letting go of that emotional investment isn't easy.