My wife and I recently moved from Mississippi to Florida. We own a home in Mississippi that we've been trying to sell since early October. We bought it for $126,000 in 2011 (100% mortgage, PMI was rolled into the loan principal - facepunches welcome, I had no idea what I was doing). We now owe $108,000.
We have it listed for $129,000 and we had one decent offer on it (we would have netted $124,000), but the deal fell through because the buyers couldn't get a loan. The market is incredibly slow, and I'm afraid that I would have to price the thing at ~$115K to get a reasonably quick sale on it. It's currently costing us about $700 a month in interest, taxes, insurance, and utilities to hang on to it.
I have been toying with the idea of renting it. My next-door neighbor from Mississippi was a friend and someone I trust. He is an experienced landlord and handyman (full-time, actually) and owns several of the homes in our neighborhood and rents them out. I suspect he would be willing to manage the property for a 10% commission, though I haven't brought it up to him. He would also be my guy for most maintenance/repairs.
I could probably re-finance the property on a 30-year mortgage at 4% interest (it's currently at a painful 5.125%), which would reduce the monthly mortgage to about $516. Taxes+insurance are $210/mo. Add in 10% property management costs, and that works out to ~$840 in fixed expenses. I know it would rent for $1100/month in a heartbeat. I could probably get $1200/month without much trouble. So, that gives me an allowance of $260-360/month to cover vacancy/repairs. The roof is new (2013), the HVAC is creeping up in age (2008 I think).
Any thoughts on the financials? If I felt like appreciation was a possibility, I would probably be more gung-ho about the thought of renting, but in all honesty, I feel like this is a dying market, so cash flow would be my only hope.