Author Topic: Case study: Stay, Sell or rent it?  (Read 1570 times)

DollarBill

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Case study: Stay, Sell or rent it?
« on: October 27, 2014, 01:12:28 PM »
Got a case study for you! Let me know if I left anything out. Thanks!

About the property:
Single family, 5 bed, 3 bath, 2.5 garage.
Market Value: $185K (House built in 2006)
Original Purchase price: $158.5K (Bought in 2009)
Mortgage Amount: Paid off
Taxes and Insurance:  $70 Insurance, $333 Taxes (The specials will be paid after 2019 dropping taxes to $230)
HOA costs: None as of now. I was told when I bought that the HOA will start when the development is 80% done but have never heard anything since.
Possible rent: $1200-1400

Plan A (Stay): I just retired from the AF and my pension covers all of my living expense and about $500-700 spending cash.
Pro's: It's a real nice area, cheap living and good job market (Not really looking but been offered a few).
Con's: it's Kansas! Sorry fellow Kansans but I would like to be near some mountains or beaches.

Plan B (Sell): My original plan was to sell the house and find an area I like better. If/when the house sells the AF will move house hold items and will store my stuff for up to a year (Cost is covered). I would use this time to slow travel and decide where I want to live. It's the first time I've ever had a choice where I want to live (Scary and exciting).
Pro's: Free and clear to go anywhere. Most likely frees up about $170K to invest/buy a smaller house.
Con's: $15K Commission fees (How is this legal?)

Plan C (Rent it): Possible rent income $1200-1400. Renting it out scares me, I'm risk averse. I rented out a townhouse before and lost about $20K (I'll do another thread and post a link to the story).
Pro's: Good income $797-$997 but would still need to find a new place to live.
Con's: I would need to rely on this rent income to pay mortgage or rent at a new residents. I have about $50K saved to invest or use toward a new house. Ties to Kansas and don't plan on staying, possible damage, property manager.

What would you do? Any ideas for a plan D?

 

arebelspy

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Re: Case study: Stay, Sell or rent it?
« Reply #1 on: October 27, 2014, 04:36:52 PM »
Renting it out scares me, I'm risk averse.
...
I would need to rely on this rent income to pay mortgage or rent at a new residents.

Sounds like you shouldn't rent it out.  I vote you start with A, then B when you eventually move.
We are two former teachers who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and are now settled with three kids.
If you want to know more about us, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (rarely) blog at AdventuringAlong.com. Check out our Now page to see what we're up to currently.

waltworks

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Re: Case study: Stay, Sell or rent it?
« Reply #2 on: October 27, 2014, 09:24:13 PM »
Sell it, then wander around and find somewhere you love.

$170k isn't going to go very far near mountains or beaches, in general, though.

-W

DollarBill

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Re: Case study: Stay, Sell or rent it?
« Reply #3 on: October 30, 2014, 08:41:41 PM »
I think you guys are right.
Quote
Sounds like you shouldn't rent it out.  I vote you start with A, then B when you eventually move.
I'm going to wait until I receive my retirement check to figure everything out. If I decide to get another job then I would feel good about renting it out.

escolegrove

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Re: Case study: Stay, Sell or rent it?
« Reply #4 on: October 31, 2014, 02:00:46 AM »
My husband is active duty navy. Our plan for early retirement upon is retirement from the navy is based on our cash flow from our rental houses. Navy pension is a bonus but our reliance is from our rentals. While be a landlord can certainly have it's moments so does the stock market or tons of other investment options. Honestly the importance is making sure your happy and comfortable with your investment.