I am moving in with my fiancee this summer and have been debating for months whether to turn my house into a rental or sell it. The basics:
Market Value: $180,000
Original Purchase price: $114,000
Original Mortgage Amount: $91,200
Interest Rate: 5.125%
Mortgage Term: 30 yrs
Term remaining: 20 yrs
Amount remaining on mortgage: $68,000
Gross Rents: $1,400 / mo.
Principal and Interest (the P&I of your PITI - should match with the above info): $500 / mo.
Taxes and Insurance (the T&I of your PITI): $245 / mo.
HOA costs: $0
Additional Info:
-I've put numbers through NARPM rent vs sell calculator (
https://www.narpm.org/members/resources/rent-vs-sell-calculator/) , they say if I rent it I'll have 20K more wealth after 5 years, 64K after 10, and 230K after 20 years. (vs selling and investing profits at 6% return assumption)
-Neighborhood is Northeast Minneapolis. I've lived here 10 years and know for certain both the rental market and sellers market are very strong. It's a wonderful neighborhood, close to downtown, in past 5 years especially development is going nuts with many new condos, trendy restaurants, etc.
-I am not handy. I've never even painted a room. The house is 100 years old and while I've had no issues with it in the past decade, I don't know much about the inner workings except that they are old. Appliances older as well. I'd look forward to doing the administrative work required to be a landlord, but would hire out the handy work.
-There are some potentially major maintenance needed to get this place in shape. Crumbling retaining wall that we're in the process of trying to figure out if it's ours or neighbors responsibility (we think neighbors, it's holding up their yard, but even if it is, then we need to get them to fix it?). Just discovered this weekend large crack in concrete front steps, they were janky to begin with, but now is really a safety issue and need to be repaired. South side of house badly peeling and needs repainting. Many tiles in bathroom floor cracked, may be an issue with subfloor, needs repair. Sometimes we hear noises in attic that sound larger than mice for sure... are squirrels getting up there? The above calculator figures $10K to get the house "ready", but is this just all too much?
-I go back and forth wondering if it's worth it. Maybe after all the initial repairs, learning curve of getting started, getting a renter in here, it will be easier? I know that's a gamble, depending on behavior of renter and unknowns with the house. And then another voice in my head saying loudly "once you sell it's gone forever, you've lost this chance".
We have spent hours talking about this, doing calculators, making pro and con lists. Fiancee is supportive of either choice, this would be my undertaking. So torn, any advice appreciated!