Author Topic: Rent or Sell?  (Read 1696 times)


  • 5 O'Clock Shadow
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Rent or Sell?
« on: August 21, 2013, 03:05:51 PM »
I'm trying to assess whether we should sell our what is now our primary home, or keep it as a rental when we move to a slightly bigger house on a quieter street.  (As background, my partner and I live in NE Seattle with 3 kids with a fourth on the way so we need more space and not to live on the busy street we currently do.) 

The housing market has been rather hot here for sellers, with many properties in this part of town going over asking price with multiple offers.  Our current house is in very good condition and we've done lots of updates.  I estimate that we could get at least between $425-450k if we sold.  The other numbers are this:

We paid $410,000 when we bought the house in October 2010.  We only put 5% down on this house, and recently refinanced to a mortgage of about $387k to a rate of 3.625% for a 30-year fixed.  This translates into a monthly payment of $2131, which includes taxes and insurance.  I'm guessing we could rent our house for $2200-$2500. 

Obviously this wouldn't be a big monthly excess of money for us once the mortgage is paid.  However, we would conceivably build equity in the current house.  The systems and appliances are all new-ish so I don't anticipate any major repairs being needed with tenants.  That said, things do go wrong and neither my partner nor I are particularly handy.  Should we sell for a small profit or hang on to it with the potential headache of renting it out?

Numbers Man

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Re: Rent or Sell?
« Reply #1 on: August 21, 2013, 03:10:28 PM »
I'm reading between the lines here. But if you could only afford to put 5% down on your home, I doubt that you can afford to pay the mortgage on the rental plus your new home if there's a vacancy in the rental.

Another Reader

  • Walrus Stache
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Re: Rent or Sell?
« Reply #2 on: August 21, 2013, 05:49:54 PM »
The best time to sell a house with incurable defects is in a hot sellers' market.  In a balanced market, you will take a big hit for the busy street.  In a market tilted toward sellers, people pay more just to have a house. 

If you rent it, with vacancy and collection loss plus operating expenses, you will lose money.  Read up on the 50 percent rule on other threads here to get an idea of real landlord expenses.  You may not experience all of the expenses immediately, but over time 40 to 50 percent of your gross income will go to expenses, including capital replacements. 

In your shoes, I would sell now while the market favors the seller.