Hi all, my fiancee and I are in the first stretch of our FI journey (about $50000 in VTSAX so far) and I am inheriting a house. I have always had a sort of obsession with the idea of investing in rental properties once I was out of debt. I am somewhat handy and it appeals to me. Now that I am debt free a property is falling in my lap. However, running the numbers, it seems like it would be a much more potent idea to just sell it and pour the cash into VTSAX. I have also been eyeing multifamily units around the Hudson Valley, but since I won't be back on the East Coast for a couple of years (currently in CA), it doesn't make sense to pull the trigger on that.
According to Zillow, the house is worth 190k. It is one of the nicer houses in a nicer neighborhood of Brownsville, TX. It needs a little work; by my (untrained) estimate it needs around $5-6k of work to be sellable/rentable. I currently have a contractor working very slowly on it for a cheap price. I am going to take Zillow with a grain of salt and say I could sell it for $165k (I have no idea how accurate Zillow is). So $165k-$5(rehab)-$5k(selling cost)-$61k(mortgage) would give us around $94k. I've worked out that if I were to rent it out, the cashflow would be around $150 per month (this includes 10% for vacancy, 10% for management, 10% for cap ex, releasing, other standard things). An average stock market return (7%) on $94k would be about $550 per month. Is this as much of a no-brainer as it seems?
I would be splitting all of this 50/50 with my sister, but I am in charge of figuring it all out. Any advice appreciated! Feel free to point out if/where I am being naive!
EDIT: We will be selling. Somebody in the neighborhood has offered to buy the house. He has not made an offer yet, but if it is close the market price (I'll check out some comps from the last few months) would it be practical to skip a realtor? It would be nice to not pay one. They lawyer who is handling my father's estate also happens to be a title lawyer, so she can handle that part of it. Sorry if I'm missing something, this will be my first time buying/selling property.