Author Topic: to sell or rent when I move out  (Read 1358 times)

rebeltoconform

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to sell or rent when I move out
« on: May 14, 2013, 01:48:54 PM »
I am currently the owner of a charming bungalow in a suburb just outside Detroit, MI. I moved here for work five years ago (only 3 miles away - easily bikeable) and after a year of renting I decided to buy. I bought at an excellent time, when the government was offering 10% back in cash for first-time buyers. My purchase price was $74,200 and I got a 5% 30 year FHA loan. I have been living there for four years, occasionally renting rooms to friends, and have since met a wonderful lady who owns her own house in a nearby city.

As we begin to think about moving in to a new house together, we are faced with the question of whether to rent our current houses or sell them (I'm only going to speak to my own house here.)

What I do know is that my house has gone up in value. I talked with my realtor recently and he estimated its value around $110K.

Would I be better off renting this house in a couple years when I move out and for how much? (It's got two small main floor bedrooms, a large upstairs master bedroom and a finished basement.)

As a side note, I am also looking into refinancing to get a lower interest rate (somewhere in the 3.5%/15 year range)

Thanks in advance for your thoughts!

olivia

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Re: to sell or rent when I move out
« Reply #1 on: May 14, 2013, 05:53:17 PM »
What are comparable houses renting for in your area?  Can you check Craigslist or Zillow?  I think whether you should rent it instead of selling it depends on whether you have positive cash flow after mortgage, taxes, insurance, etc.  And of course, if you want to be a landlord.  If you can get positive cash flow and want to be a landlord, I would keep it. 

I recall correctly there's some sort of rule with an FHA loan that you have to live in a home as your primary residence for a certain period of time, so you may want to look into that.  (I had an FHA loan for my first house but it was a while ago and I don't remember the exact rules.)

I'm sure experienced landlords will chime in, too.