Posted by Tim Jensen on February 16, 2001 at 22:51:53:
I like what Bud has to say and want to add.
I like rentals a lot , but in this case, I would just sell the place. I can handle tenants mistreating my rental properties, however I think if my own home got mistreated I could not handle it.
Just a thought,
Tim
Sell or Rent?? - Posted by Bryan Christophe
Posted by Bryan Christophe on February 16, 2001 at 06:39:32:
I bought a house with my VA loan in Metro Atlanta 5 years ago. My wife and I want to buy a new home in another suburb on the other side of town for various reasons. My question is this:
Should we keep our current house and rent it out, or should we sell it and use the profit as a down payment on the new house? I’m sure that we can get $20K or more from the way recent homes sold in the neighborhood.
Bryan C.
Now, the down side of rentals - Posted by Bud Branstetter
Posted by Bud Branstetter on February 16, 2001 at 09:38:30:
First, determine your eligibility for VA. Next get with a mortgage broker to see what down and closing costs are needed to get into your new house. This may guide you to make your decision.
Now, as always, the problem with rentals are tenants and toilets. People like Phil are experienced landlords. He can tell you the horror stories of tenants maintaining the place, skipping in the middle of the night, or just getting them to pay on time. This is not to scare you but to be realistic if you have never been a landlord. Yes, there are ways to help, L/O’s, owner financing, Pactrusts. You give up something like future appreciation in some of these in return for less hassle or higher payments. Don’t go into landlording without studying something about it.
Rent for sure… - Posted by ken in sc
Posted by ken in sc on February 16, 2001 at 07:27:54:
If you have a VA loan, you probably invested little to no money down. Let’s say you invested a total of $3,000 out of pocket to purchase the house. If the house is going up $4,000 per year, and your mortgage is paying down $1,000 per year, that would be $5,000 made on a $3,000 investment per year if the cash flow breaks even. That is a 167% return! I don’t know what you could do with that money that would be better. Plus, if you sell you won’t get $20,000. There would be costs associated with the sale that eat some of that up. If you can buy your next house without selling, you definently should.
My 2 cents - Ken
Re: Sell or Rent?? - Posted by phil fernandez
Posted by phil fernandez on February 16, 2001 at 07:19:34:
If it were me, I’d keep the house and convert it to a rental. If you bought 5 years ago you must have a low interest rate which in turn will help your cash flow. Assuming that the house does cash flow why not keep it. Along with the cash flow your tenant will be further paying down the mortgage through his rent.
When converting the house to a rental you can start depreciating it and sheltering income. By holding the house you have the chance of appreciation.