The real issue from what I see are people who want to always get properties in their immediate region, try to play handiman and do the repairs themselves to save money, try to be landlord as well, and end up failing at both.
We ended up doing kind-of this. In lieu of selling our townhome we are trying renting it out. Good neighborhood, sleeper-type community, very close to our house. I even like doing house repairs and we have good tenants and I still can't stand it. For now the income is a wash so we're waiting on a good market to get rid of it. Summary - I am impressed with people that can truly handle being a landlord.
Right before you go to sell, estimate out your full equity into the house, find out what the general "value" of the area is. Find what your selling price is, and then go straight to a bank for a cash out refi.
Heres the math:
House bought 1990: 100k
House up for buy: year 2000
Time in years: 10
Time in months: 120
Mortgage, taxes, PMI: 700
Time for tenancy: 120
Tenancy occupancy: 70%
700*120=84,000 paid
Current Mort. Rem.: 81,144
Assume we say at this point, that your house property went up 2% per year (reserved estimate), your house in 10 years is worth 121,899.
To ensure it sells, I always say sell it at least 5% below market value, which would be 115k.
Important numbers:
Amount owed: 81,144, Amount sell: 115,000, Amount diff: 34,660, Equity from origin: 18,566, Total potential income(sale+equity): 33,566, total income (rent((before damages): 0 (your M+I ate your income)
This meets the x and y, 0 of the 700/70 rule.
Overall profit margins are 34,460, by a 10 year time frame, total value is roughly a 3.4% gain over time. Before taxes.
This is why its crucial to maintain at least a 85% occupancy minimum, and is why I preach it so heavily.
Math proofs based off of Kahl's mortgage calculator + manual calculations, standard rate 4% mortgage, 0 down payment, 100k principal balance, 10 year (120 month) term on a 30 year fixed rate mortgage.