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Started By
Message
Would you Sell or Rent?
Posted on 3/19/15 at 12:06 pm
Posted on 3/19/15 at 12:06 pm
I am relocating to Oxford, MS, in August. I currently live in my house and bought it as a HUD house - $37,000. My monthly mortgage is now $425 after county taxes went up this year. This, also, includes about $120 a month in flood zone insurance, my escrow and insurance. Not a bad price at all.
I have put in about $18,000 into the house including new flooring, lighting, hot water tank, screened patio, fence, and other small things. It looks good, although it is just a 2BR/2BA house.
It is appraising in the upper $70k range. If I sold it right at $70k, I could estimate a $15k margin I could cash out with on my first house. However, I am looking into possibly renting the place out. In the condition of the house, I believe I could outdo the other houses in similar spots due to the condition of it.
Question, how much would I have to rent it for to make this the better option than selling it for $70k? Ideas or suggestions?
I have put in about $18,000 into the house including new flooring, lighting, hot water tank, screened patio, fence, and other small things. It looks good, although it is just a 2BR/2BA house.
It is appraising in the upper $70k range. If I sold it right at $70k, I could estimate a $15k margin I could cash out with on my first house. However, I am looking into possibly renting the place out. In the condition of the house, I believe I could outdo the other houses in similar spots due to the condition of it.
Question, how much would I have to rent it for to make this the better option than selling it for $70k? Ideas or suggestions?
3
Posted on 3/19/15 at 1:12 pm to rpg37
Much more info needed.
Rent estimate?
Avg appreciation yearly if any?
Maintenance cost?
Vacancy rate expected?
Capital expenditures expected over next 5 years?
Do you want to refi and pull cash our for next house? Are you aware the next mortgage will not be as easy to get since you already have a primary mortgage in place?
Lots of variables.
Rent estimate?
Avg appreciation yearly if any?
Maintenance cost?
Vacancy rate expected?
Capital expenditures expected over next 5 years?
Do you want to refi and pull cash our for next house? Are you aware the next mortgage will not be as easy to get since you already have a primary mortgage in place?
Lots of variables.
Posted on 3/19/15 at 1:15 pm to rpg37
-What price do you think you could rent it for?
-Could you use the $15K for something else right now?
-Can you afford to pay the note if it doesn't rent immediately?
-I'm not sure where the house is compared to Oxford, but could you make it back to check on the house every once in a while (quarterly, at least) to make sure your tenants aren't wrecking it?
-Do you want to deal with the hassle of having to take care of repairs from long distance?
- How soon would you like to get your money back?
These are all questions you have to answer for yourself- you can't really ask them of other people, because they may have a higher/lower risk tolerance than you do.
-Could you use the $15K for something else right now?
-Can you afford to pay the note if it doesn't rent immediately?
-I'm not sure where the house is compared to Oxford, but could you make it back to check on the house every once in a while (quarterly, at least) to make sure your tenants aren't wrecking it?
-Do you want to deal with the hassle of having to take care of repairs from long distance?
- How soon would you like to get your money back?
These are all questions you have to answer for yourself- you can't really ask them of other people, because they may have a higher/lower risk tolerance than you do.
Posted on 3/19/15 at 1:55 pm to nogoodjr
Rent estimate? $600 would be easy, but I believe $700.
Avg appreciation yearly if any? Depends strictly on the market, no?
Maintenance cost? Minimal. Most all items are new.
Vacancy rate expected? Goal is to make this annual. I am currently posting on teacher websites (i.e. Teach for America)
Capital expenditures expected over next 5 years? I am not quite sure what you are asking me here. Sorry for my ignorance.
Avg appreciation yearly if any? Depends strictly on the market, no?
Maintenance cost? Minimal. Most all items are new.
Vacancy rate expected? Goal is to make this annual. I am currently posting on teacher websites (i.e. Teach for America)
Capital expenditures expected over next 5 years? I am not quite sure what you are asking me here. Sorry for my ignorance.
Posted on 3/19/15 at 1:58 pm to LSUGUMBO
-What price do you think you could rent it for? Goal is $700 (apartnments here are the same for two bedrooms...)
-Could you use the $15K for something else right now? Yes, that is about the total amount I owe in all debt - student loans and credit loans.
-Can you afford to pay the note if it doesn't rent immediately? Yes.
-I'm not sure where the house is compared to Oxford, but could you make it back to check on the house every once in a while (quarterly, at least) to make sure your tenants aren't wrecking it? I is a 90 minute drive. So, yes.
-Do you want to deal with the hassle of having to take care of repairs from long distance? I can handle small issues.
- How soon would you like to get your money back? No goal. I am simply in belief this has potential to generate a great return long-term. With the house being so cheap, I can see myself averaging $7200 per year which would pay off the house in 12 years. Then, I would own one house entirely at age 39 and living in my real home.
-Could you use the $15K for something else right now? Yes, that is about the total amount I owe in all debt - student loans and credit loans.
-Can you afford to pay the note if it doesn't rent immediately? Yes.
-I'm not sure where the house is compared to Oxford, but could you make it back to check on the house every once in a while (quarterly, at least) to make sure your tenants aren't wrecking it? I is a 90 minute drive. So, yes.
-Do you want to deal with the hassle of having to take care of repairs from long distance? I can handle small issues.
- How soon would you like to get your money back? No goal. I am simply in belief this has potential to generate a great return long-term. With the house being so cheap, I can see myself averaging $7200 per year which would pay off the house in 12 years. Then, I would own one house entirely at age 39 and living in my real home.
Posted on 3/19/15 at 2:09 pm to rpg37
You have to factor in the fact that whoever rents it will more than likely tear the place up negating your upgrades and saddling you with more maintenance costs in the future.
I'd take the profit and put the value into something you live in and take care of.
I'd take the profit and put the value into something you live in and take care of.
Posted on 3/19/15 at 2:17 pm to rpg37
Pros:
Cons:
To me, If you can make $300/month from month #1, then after the first year, you'll have enough of a cushion to handle most any emergencies, barring major disaster.
I'd at least give it a shot and see what you can rent it for and what kind of tenants the house attracts. If all else fails, you can put it on the market in 6 months or so with little money lost.
DISCLAIMER: I don't own any rental properties currently, but I aspire to one day, and my parents have several that they own.
quote:
-What price do you think you could rent it for? Goal is $700 (apartnments here are the same for two bedrooms...)
-Can you afford to pay the note if it doesn't rent immediately? Yes.
-I'm not sure where the house is compared to Oxford, but could you make it back to check on the house every once in a while (quarterly, at least) to make sure your tenants aren't wrecking it? I is a 90 minute drive. So, yes.
-Do you want to deal with the hassle of having to take care of repairs from long distance? I can handle small issues.
Cons:
quote:
-Could you use the $15K for something else right now? Yes, that is about the total amount I owe in all debt - student loans and credit loans.
To me, If you can make $300/month from month #1, then after the first year, you'll have enough of a cushion to handle most any emergencies, barring major disaster.
I'd at least give it a shot and see what you can rent it for and what kind of tenants the house attracts. If all else fails, you can put it on the market in 6 months or so with little money lost.
DISCLAIMER: I don't own any rental properties currently, but I aspire to one day, and my parents have several that they own.
Posted on 3/19/15 at 2:50 pm to rpg37
Check rentometer.com
Posted on 3/19/15 at 3:11 pm to eng08
quote:
Check rentometer.com
Your results are based on:
34 2-bedroom rentals
…in a 6.90 mile radius.
Median rent: $750
Average rent: $746
60% between: $671 – $820
80% between: $632 – $859
So, this easily falls into my $700 goal. I am just thinking, that with the RIGHT tenant, and I understand the work on my end that goes into finding this person, this could really be something.
Posted on 3/19/15 at 3:23 pm to rpg37
I'll be honest I have a cheap rental house 750 a month and I work MUCH harder for that rent than some of my more expensive houses
Posted on 3/19/15 at 3:26 pm to bobaftt1212
How do you mean? Collecting or maintenance, etc?
Posted on 3/19/15 at 4:13 pm to rpg37
Sell it.
A good monthly margin is great, but in that price range, in MY opinion, you're dealing with a little riskier potential tenants...and your profit on the sale might be 15K or whatever, but you're not paying any tax on that, plus you're getting back your initial investment.
You're not going to be just across town to be able to fix easy things or actively manage....
Sell it and walk away with your 30K+
A good monthly margin is great, but in that price range, in MY opinion, you're dealing with a little riskier potential tenants...and your profit on the sale might be 15K or whatever, but you're not paying any tax on that, plus you're getting back your initial investment.
You're not going to be just across town to be able to fix easy things or actively manage....
Sell it and walk away with your 30K+
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