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Thinking of Moving...Sell or Rent the House?
- Thread Starter No_Regerts
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It is a gamble renting property out.
From what i have read and researched most folks recommend having at least 6 months of mortgage payments and property taxes in reserve.
As much as people might appear to look good on paper, what they actually do in real life can vary.
Finding a long term renter with a reasonably clean history and financial background is your best bet.
I think riding out this bubble and letting someone else make your mortgage payment at current market value could be worthy in the long term big picture.
From what i have read and researched most folks recommend having at least 6 months of mortgage payments and property taxes in reserve.
As much as people might appear to look good on paper, what they actually do in real life can vary.
Finding a long term renter with a reasonably clean history and financial background is your best bet.
I think riding out this bubble and letting someone else make your mortgage payment at current market value could be worthy in the long term big picture.
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Sell. And move to the country.
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This^^^
Take the money and run.
Take the money and run.
Member 5605
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It will take 12.5 years for you to recover your 90K if you get $600/month over mortgage. Why not dump it and use that to fund your new place?
Turnover at high rental rates happens. Leaves you open for vacant months, being the landlord and all that fun stuff that goes along with it.
Strike while the iron is hot?
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The house values in the pacnw are off the charts. Usually since there's piles of Cali moving there I'd say the pricing won't dip much. It's gonna doo big this time. Find a place that's cheaper area wise. Living near any city like Portland is slow death..
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The only reason I'm thinking about renting is Fort Lewis. Lots of soldiers who rent places. BAH for a married E6 is $1900. Otherwise, I wouldn't really wanna deal with it.
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Its weird because I live in a subdivision out in the middle of unincorporated nowhere.
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Can you be a LEO in eastern Washington? Like outside tri cites?
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Sure can. But my wife wouldn't have it. She grew up in Portland and has lots of family there. I was actually putting in for for a transfer to the Clarkston area when we met. Withdrew the paperwork. Still wish I could have made that work.
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Would she bend if you pleaded your case more? What town is she from?
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I was raised on Tigard. Parents are from Idaho. Been coming here all my life. When you live in a place like Idaho, then visit the pacnw, it's downright twilight zone different.
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I dont think she'd bend. Her parents are from Southeast Asia and their community , like many immigrant communities, is really close. I'd also hate to take my daughter away from that. I hate to say it, but homegrown Americans just don't know tight like these communities do.
But when they all die, I'll push the issue again. I try to get her to take trips east of the mountains with me. I go to Banks Lake, Potholes, and Lake Roosevelt to fish for walleyes. She seemed to have fun. But, she complains about the dry heat.
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Sell what you got and buy what you want before Mortgage rates rise.
I Don't know where you plan to settle but there are a lot of nice locations that have much lower costs than the big city. A lot depends on if you are retiring or what.
Imagine having a nice place for your current equity $ and a mortgage payment that's a quarter of what you have now? That money you aren't paying could easily equal what you'd hypothetically make renting out your current house....
... without any rental hassle, risk or work.
Heck! around these parts $150k will get you 10 wooded acres with a nice 3 bedroom.
I Don't know where you plan to settle but there are a lot of nice locations that have much lower costs than the big city. A lot depends on if you are retiring or what.
Imagine having a nice place for your current equity $ and a mortgage payment that's a quarter of what you have now? That money you aren't paying could easily equal what you'd hypothetically make renting out your current house....
... without any rental hassle, risk or work.
Heck! around these parts $150k will get you 10 wooded acres with a nice 3 bedroom.
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That's cheap!
We are planning to have the house paid off by winter.
In the same boat , heading to Scout and shoot with my son who livea there in the Nampa area. Within the next 90 days.
My machine shop supply guy is in Nampa come Monday and is putting a good word in for me at the shops he deals with.
May rent to daughter and son in law.
As he is getting outta the army in about sixty days.
Timing seems to be right....
My machine shop supply guy is in Nampa come Monday and is putting a good word in for me at the shops he deals with.
May rent to daughter and son in law.
As he is getting outta the army in about sixty days.
Timing seems to be right....
Imo it depends on the timeframe you want to retire. 15-20 years or more left to work rent that bad boy and have a great income stream when the time comes or sell it and pocket the cash. Your not really going to be pocketing much money every month. If ya do rent be sure to have triple net built into the lease so any increase in insurance or property tax is on the renter. Only reason I would sell is retirement or absolutely needed the equity for the new casa.
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Tough call.
Given just the 1, I'd say sell.
If you were thinking on getting into the rental game (duplex, triplex, 4 plex etc) that'd be different. With just the 1, the risk is too high (IMO).
It'd take just 1 bad tenant to give you a loss, and then months to get them out. Then fix what they trashed etc etc. unlikely you would recoup anything at all in court (possible, but unlikely).
Plus you'd be better served staying local to keep an eye on it. Monthly/bi monthly or quarterly walk thrus. Standard upkeep and maintenance which a tenant would not be aware of nor responsible for.
Going a property management route would be a possibility, but it'd severely cut into any profit. So really not worth while on 1 unit. Plus assuring the prop management company is doing there job.
Multiple units the risk is still there, but being multiple, it's slightly mitigated.
Given just the 1, I'd say sell.
If you were thinking on getting into the rental game (duplex, triplex, 4 plex etc) that'd be different. With just the 1, the risk is too high (IMO).
It'd take just 1 bad tenant to give you a loss, and then months to get them out. Then fix what they trashed etc etc. unlikely you would recoup anything at all in court (possible, but unlikely).
Plus you'd be better served staying local to keep an eye on it. Monthly/bi monthly or quarterly walk thrus. Standard upkeep and maintenance which a tenant would not be aware of nor responsible for.
Going a property management route would be a possibility, but it'd severely cut into any profit. So really not worth while on 1 unit. Plus assuring the prop management company is doing there job.
Multiple units the risk is still there, but being multiple, it's slightly mitigated.
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We are both 35, so we got a ways. I'll have 20 years in at 42, I will likely park that retirement and change careers. She's in the medical field and does pretty well, bit still has a ways to go.
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My advice...
IF you are reasonably sure (or concerned) that the avg rental pool there will slowly destroy your investment, I'd sell. Here's why...
-If you sell now, your capital gain is not taxed. (I'm assuming you have lived there for at least 2 years, or 24 of the last 60 months).
So, you'd clear $93,000, minus the $18,000 in reality fees, for a net gain of $75,000 tax free.
If you RENT for more than 3 years, you will lose this tax exemption. That's a huge loss, about $25,000 (33%).
-Additionally, are you prepared to be a landlord? Calls in the middle of the night for a clogged toilet or blown out pilot light? If not, figure 8% for a property manager. SO, your $550 monthly positive net is reduced to about $400.
However, there is some good news...you'll want to consult your tax guy about this, specially now with the new tax laws, but your mortgage interest is currently deductible dollar for dollar on a rental property (only deductible at about 33% on a primary residence). In other words, if you are paying $5,000 per year in mortgage interest on your rental, you can take that $5,000 directly off your annual gain. And at $400 per month, your gain is about $5k...so you won't pay taxes on the gain. So, as someone else said, someone else is paying your mortgage, and you are putting about $400/ month into the bank.
In the end, it boils down to your tolerance for damage to your property, and your ability to buy something else without the $75,000 you'd gain from the sale of the house.
IF you are reasonably sure (or concerned) that the avg rental pool there will slowly destroy your investment, I'd sell. Here's why...
-If you sell now, your capital gain is not taxed. (I'm assuming you have lived there for at least 2 years, or 24 of the last 60 months).
So, you'd clear $93,000, minus the $18,000 in reality fees, for a net gain of $75,000 tax free.
If you RENT for more than 3 years, you will lose this tax exemption. That's a huge loss, about $25,000 (33%).
-Additionally, are you prepared to be a landlord? Calls in the middle of the night for a clogged toilet or blown out pilot light? If not, figure 8% for a property manager. SO, your $550 monthly positive net is reduced to about $400.
However, there is some good news...you'll want to consult your tax guy about this, specially now with the new tax laws, but your mortgage interest is currently deductible dollar for dollar on a rental property (only deductible at about 33% on a primary residence). In other words, if you are paying $5,000 per year in mortgage interest on your rental, you can take that $5,000 directly off your annual gain. And at $400 per month, your gain is about $5k...so you won't pay taxes on the gain. So, as someone else said, someone else is paying your mortgage, and you are putting about $400/ month into the bank.
In the end, it boils down to your tolerance for damage to your property, and your ability to buy something else without the $75,000 you'd gain from the sale of the house.
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