Author Topic: Case Study: Prep to sell or prep to rent?  (Read 968 times)

Wings5

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Case Study: Prep to sell or prep to rent?
« on: June 14, 2015, 03:49:27 PM »
Homes on my street have been listing and selling for anywhere from $55 to $100 per square foot, so nailing down a potential selling price is difficult. I would estimate we could get anywhere from $105,000-$130,000, estimating conservatively.

Market Value: $105,000-130,000 (Tax appraisal is $118,500, but homes in our area are selling for +/- $10,000 of tax value)
Original Purchase price: $113,000
Original Mortgage Amount: $107,350
Interest Rate: 3.75
Mortgage Term: 30 years
Term remaining: 15 years, 6 months (technically 27.5 years; we have always paid $200 extra towards principal each month)
Amount remaining on mortgage: 97,851
Gross Rents: $1400
Principal and Interest (the P&I of your PITI - should match with the above info): $497.15
Taxes and Insurance (the T&I of your PITI): $446.28
2-year maintenance repair outlook: $7500 (kitchen, bathroom, fence, and structural landscaping)

I would like to move in the next 2 years and I'm trying to weigh the pros and cons of keeping the current house as a rental vs. selling it altogether. If we sell, I would hold off on about $6000 of the maintenance items so the new owners could do the kitchen and bathrooms as they see fit. If I hold to rent, I would go ahead with all maintenance items. I see this $6,000 trade off as money given to a realtor vs. seed money to start property investing. Right now I'm trying to decide whether I should lean towards on or the other, as that will influence whether we make repairs/changes in the coming months.

Thanks for any input!


arebelspy

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Re: Case Study: Prep to sell or prep to rent?
« Reply #1 on: June 14, 2015, 05:56:09 PM »
Numbers sound decent, I'd lean towards keeping if it's in a decent area, unless you hate the idea of being a landlord and can't find a good PM.
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