Sirenspan, Home Buyer in Fair Oaks, CA

Should we just sell house or rent it out?

Asked by Sirenspan, Fair Oaks, CA Fri Sep 21, 2012

Trying to decide if buying a newer house in better location and renting out our other house is worth it for positive cash flow. We have a house with payment under $1000.00 and thinking of buying a house in another area because of school choice, and renting out the our $1000.00. The renter market price in our area is $1600 to $2000. We do have equity in current house if need to sale. Me & my wife have great jobs and can retire in five years. We are under fifty YOA and have two great children with one to start college in six years and the other in eight years. We are losing our mortgage tax write off more and more each year. We will need a better write off or pay much more in tax's. I would like to rent our house for positive cash flow and this will keep an asset for years to come. Is this worth the effort? Also, we will be ready to sale or rent out house in six to eight months while saving more money for more liquid cash for savings. We want to move out of current house for schools.

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Best advice I can give you , connect with an experienced local Realtor, who can provide you with both
the real possibility of selling your home for how much in your market and based on the type and condition of your current home and what you still owe to the bank.

Then see what you could potentially and realistically rent it for, how busy is the rental market in your area, and can you hold on to the property if for 3 4 or 5 months after one renter leaves there is no
new one!!!

Careful very careful, work with an area Realtor, who knows both well the selling and the renting market.

Sincerely yours,
Edith YourRealtor4Life & Chicago and Northern Illinois Expert

Working always in the very BEST interest of her clients, Buyers, Sellers and Investors alike....
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0 votes Thank Flag Link Sun Sep 23, 2012

The decision to rent your home for cash flow or sell it is not a tricky one. One will (may) bring you a somewhat steady stream of income, while the other one, selling the home, means cashing out. Based upon the current rent rates in your area, you can assess what your "income" might be. Based upon the current value of the property (I recommend a CMA from a real estate professional), and what you owe on the property, you can assess what profit you may gain from selling the home.

So the question really becomes, do you "cash out" now or keep it and get a slower "cash out" in the form of rent, and hope the equity will continue to increase. Remember, no one can guarantee you increased equity. So I don't think anyone on this thread would be able to answer that for you.

Now the purchase. If you are able to purchase in this current market, you would definitely get the best price at the best rates, no doubt. But you mentioned that you were going to be ready in six to eight months so that you can save toward this new purchase. This means more of your own money going out. What are you trying to achieve? Savings? Future equity?

I recommend you sit with a financial planner and discuss your personal financial goals which will include more than just the real estate, but will also help you see how you should hold your real etsate assets to help you meet your future financial goals.
0 votes Thank Flag Link Fri Sep 21, 2012
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