Should I sell my house or rent it?

[s0me0nesmind1]

Were looking to move to a new house in the next coming years. But one of my main questions has been if we should sell our house or just attempt to rent it out. I've heard mixed reviews. I have an uncle that swears by it and owns multiple properties now that basically pays for his income. Likewise, I've heard plenty of other stories where renting is a pain in the ass strictly based on what a pain tenants typically are.... Especially lower income ones.

What is AT's thoughts on moving up in life and if you should sell-off your starter home or attempt to rent it out?



Some background on the house: We are in a middle-class household neighborhood - so think average income... blue collar workers. We already have the house paid off at this point. So far our house has appreciated a little less than 50% when we originally bought it for ~$140k after the housing crisis. So if we sold it then it would definitely be for a profit. Add on top of that enhancements (Replaced carpet, put in hardwood, other small things).

 

[Thebobo]

Sell and get rid of it imo. Unless you want to be a slumlord and deal with problems or you could hire a not sure what they are called but they take care of rentals for folks. Is still a good market to sell?

 

[lxskllr]

I have zero interest in being a landlord, and would take less money to not have to be one. If renting a house was crucial to my wellbeing; well... you gotta do what you gotta do, but I wouldn't do it out of choice.

 

[s0me0nesmind1]

I have zero interest in being a landlord, and would take less money to not have to be one. If renting a house was crucial to my wellbeing; well... you gotta do what you gotta do, but I wouldn't do it out of choice.

Sell and get rid of it imo. Unless you want to be a slumlord and deal with problems or you could hire a not sure what they are called but they take care of rentals for folks. Is still a good market to sell?

Both the wife and I are full time employed (and that is likely to never change) - so if we WERE to go forward with renting it out... it would be very likely that we would hire a service to do the management.

Just saying if that affects your opinion one way or another.

 

[lxskllr]

Both the wife and I are full time employed (and that is likely to never change) - so if we WERE to go forward with renting it out... it would be very likely that we would hire a service to do the management.

Just saying if that affects your opinion one way or another.

It affects it slightly, but the buck still stops with you, and someone else is getting a cut. I like clean breaks. A house is something out there that I have responsibility for, and is a mental liability.

I don't value money like other people, so what I say should be taken with a grain or more of salt, but if I had a good career, with guaranteed good retirement, I wouldn't want an albatross out in the world that needs my attention.

 

[IronWing]

Burn it and collect the insurance. Sell it. Landlords suck, tenants suck.

 

[dasherHampton]

I'm actually wrangling with the same thought.

I'll most likely sell it but if I do rent it out I'm going though a rental service. I don't want to get a landlord license and I sure as hell don't want to deal with phone calls in the middle of the night because something is leaking or the heat went out. A rental agency is much more equipped to deal with that sort of thing.

 

[hardhat]

If you don't have much interest in doing your own repair work or managing the property yourself, and you don't know many realtors or property managers in the area, I would recommend selling it. If you have just a little bad luck with tenants you can lose tons of money.

 

[skull]

Sell it and use the 200k as a down payment on a complex. Apartment buildings are way easier to manage and make more money.

If you insist on renting the house pull a mortgage on it and use the money to buy more rentals. 1 rental house is a waste of time in my opinion.

 

[highland145]

My rentals were a pita but also low income. Said I'd never do it again but I did make $$ overall......and I just bought a townhouse for a rental ....self employed and need more revenue streams. It will not be low end and am considering airbnb. That would be ~$70/day looking at comps (30% off for a full month). Horse season is starting and the Masters is in April so it should be full until then. We also have a decent about of contract professionals in the area so we'll see.

 

[jpiniero]

Depends on when you sell it. The market could be a lot different then than it is now.

 

[Genx87]

If you do not have time to be a landlord. Then sell it. Hiring a management service for a single family home is a waste of money imo.

 

[JTsyo]

Sell it, bird in hand is worth two in the bush.

 

[Freejack2]

One of our friends is a landlord. He buys multi-family houses, renovates and rents then. It's enough for him to live off of, but it can be a serious headache for him. The impression I get is, you'll make money, but not as much as you think. Especially when you get a bad tenant.

 

[highland145]

Depends on when you sell it. The market could be a lot different then than it is now.

Sell it, bird in hand is worth two in the bush.

If you're up 50%, these.

 

[Red Squirrel]

It's crossed my mind to be a landlord but heard too many horror stories. The issue is landlords have zero rights. Tenants can stop paying rent, trash the place, even do illegal stuff like start a meth lab, and there is absolutely nothing you can do, you're not allowed to kick them out and you are on the hook for all damages they do to the place and they are not obligated to pay.

I would MAYBE consider renting my house if I moved but I would only rent it to family or someone I can trust. Failing that I'd probably lean towards selling it. I'd really have to sit down and figure out how long it will take before I make more money off rent, vs from the one time lump sum of selling it. It's probably a rather long time I imagine, because you still have to pay utilities, taxes etc so by the time that's all paid off, whatever profit you get from rent is going to be small. If you sell then that money can go straight towards the new house.

 

[PowerEngineer]

Sell it to your uncle.

 

[brianmanahan]

inb4 mai posts 5 paragraphs about how renting your house will make you a multi-millionaire in 3 years

 

[highland145]

inb4 mai posts 5 paragraphs about how renting your house will make you a multi-millionaire in 3 years

Or before Mayne does the same.

 

[Greenman]

Were looking to move to a new house in the next coming years. But one of my main questions has been if we should sell our house or just attempt to rent it out. I've heard mixed reviews. I have an uncle that swears by it and owns multiple properties now that basically pays for his income. Likewise, I've heard plenty of other stories where renting is a pain in the ass strictly based on what a pain tenants typically are.... Especially lower income ones.

What is AT's thoughts on moving up in life and if you should sell-off your starter home or attempt to rent it out?



Some background on the house: We are in a middle-class household neighborhood - so think average income... blue collar workers. We already have the house paid off at this point. So far our house has appreciated a little less than 50% when we originally bought it for ~$140k after the housing crisis. So if we sold it then it would definitely be for a profit. Add on top of that enhancements (Replaced carpet, put in hardwood, other small things).

Historically it's been producing $7k a year in appreciation, add rent on top of that, and no mortgage outlay and you're looking at a very tidy profit. I'd rent it out.

 

[s0me0nesmind1]

Historically it's been producing $7k a year in appreciation, add rent on top of that, and no mortgage outlay and you're looking at a very tidy profit. I'd rent it out.

Eh, most of that appreciation has simply been the housing recovery since the house was bought ~2008.

 

[paperfist]

How much will you get on rent?

With the right tenants you can make bank, with the wrong tenants you’ll want to kill them.

A buddy of mine shoves 5 college kids in a house @ $500 each x 3 houses. Dude doesn’t have to work if he doesn’t want to. There’s headaches of course, but you’ll get those with anything that generates money.

 

[s0me0nesmind1]

How much will you get on rent?

With the right tenants you can make bank, with the wrong tenants you’ll want to kill them.

A buddy of mine shoves 5 college kids in a house @ $500 each x 3 houses. Dude doesn’t have to work if he doesn’t want to. There’s headaches of course, but you’ll get those with anything that generates money.

And that's what (ultimately) scares me from renting.

From my few years of random advice in renting, my general stance of the opinions has been "Only rent if it's upper middle class"... The reason? You're much less likely to have someone default on rent when the rent is higher... But when you have a standard middle-class rent plenty can afford to make offers, many of which will (statistically) be more likely to default or miss payments.

I don't want too much headaches either as far as maintenance. Most people should be fully capable of fixing their own shit. There is a certain type of tenant that thinks they can call on the owner to fix every little thing. In reality, most agreements say the tenant should take care of most standard maintenance... Yet they still think the owner should.

Also as far as work - To put it into perspective with my current employer I'm highly likely to fly out Monday - Thursday for client projects, Friday - Sunday is usually clean-up (groceries, clean/maintain our house, work on Friday, etc..)

I'm starting to lean more towards selling based on what I've seen so far - yet im still open.

 

[Elganja]

I'm in the crowd of "definitely rent it"... especially since it is paid off already

if you don't want to deal with finding renters and handling landlord duties, hire a service that takes care of it for you (they will take ~10-15% cut however)

 

[skull]

I'm in the crowd of "definitely rent it"... especially since it is paid off already

if you don't want to deal with finding renters and handling landlord duties, hire a service that takes care of it for you (they will take ~10-15% cut however)

A paid off rental is the worst way to make money in real estate. After all the expenses I bet he'd make less than half what 200k parked in an index fund would make.

The great part of real estate is leverage. If OP cashed out and used the money as down payments on 7 - 10 cheaper houses or or in my area you could get a really nice 24 unit building at 30% down and have money left over. If you buy right in this scenario you could double even triple the return of an index fund.

I work for rental property owners I know a guy with 150 low to middle class single family houses and I know a guy with 135 low income units split in 8 to 24 unit buildings/complexes. The difference is night as day the buildings are way less work and dude makes a killing. He can do most of the work himself where the single family house guy has a bunch of contractors and management.

A 12 unit building has one water heater, one boiler, one sewer main, one roof where 12 houses have...

The guys with a few single family houses do nothing but bitch and complain how my bill to fix the a/c will keep them from making money the whole year. For one they probably didn't buy right, you have to take that sort of thing into account but with rental property you need volume. You have 30 units one bad tenant/repair gets absorbed, you have one unit, 1 bad tenant/repair completely screws you.