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Sell It Or Rent It |
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I have a small home (1340 sf) my mortgage payment is $712 per month, and 14 years old. Me and my wife would like to move to a larger home but are unsure if we should sell our home and pay off bills then purchase a new home or rent our current home. I could easily rent for about $850 or 900 a month. House is still in pretty good shape and I have about $40,000 or $50,000 in equity. |
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Being a landlord is not as simple as it sounds, and it's easy to get into trouble. Don't forget that your expenses are more than the mortgage payment of $712 a month. Does that include taxes and insurance? You'd need a different type of insurance as landlords, so find out what that would cost. You'd need your own accountant, not a large expense, but something you should have. One of your expenses is the loss of potential income you could be getting from the $40,000 or so you'd be keeping invested in the property. And you have to allow something for possible vacancies or unpaid rent. Then as far as eventually selling the property goes, it will never look as good again as it does when you're living in it yourselves.
Think twice about renting it out. Landlording takes some skill. Go to the library and read a few books on the subject before you decide. |
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Edith
Originally published on August 26, 2008 |
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