Need advice quick!! i'm fixing to move should i lease my property?

[Jacob Patterson]

I bought a personal home a little over a year ago and planned on living in it for 5-7 years before i sold it or rented it out. But my wife and I are possible fixing to move to Houston because she just got a job promotion. My question is should i lease my house and become a landlord? My real estate agent told me that my property in my neighborhood could rent for 1500-1750 a month and my current mortgage is 1200 a month with insurance and taxes. So that would be 3600-6600 a year. I only have 10,000 in equity in my home and i don't think i could get out from under it if i used my agent to sell it . When we move we may have to rent for 6-12 months until we would be able to buy again. I don't know what to do and could use some advice. Thanks

[Daren H.]

@Jacob Patterson I had some what of a similar decision to make several years ago. I purchased my first home when I was single but got married a year later. I moved into my wife's home (it was only 30 miles away). I didn't have much equity in the home. I knew the home was in a good neighborhood, growing city, recognized school district. I worked with my agent (who was also a PM and friend of mine) and determined that I could get rent that could cover the mortgage and the operating expenses, reserves, vacancy, etc with a little cash flow. I chose to rent my home and wait for prices to rebound. Everything I make above expenses goes back into the property (either for repair or reserves). I have steadily been building equity over the past 4 years and the home is being kept in great condition (making sure the home is kept in good condition will require work, primarily in the screening process, but it doesn't end there).

I agree with the comments from the others on this post. Definitely treat renting your home as a business and not a social exercise (And I don't think you need an LLC in your case. I believe all you need is the proper liability insurance and landlord policy.). You will need a good PM if you are not going to be near the property and if you don't desire to be a hands on landlord. You will still need to manage the PM. If I were you, I would make sure I have a good understanding of the future potential of the neighborhood for appreciation and I would firm up the rent numbers for the house (big difference between $1500 - $1750). One thing I have realized about my property is that I can get great tenants (never late payment, no issues) but they move out after two years. My last two tenants stayed exactly 2 years and purchased their own home. People who can afford $1500 in rent without issue generally (not always) can afford their own home for less in my area. Just be prepared for the potential that your home may not be a long term resting spot for tenants. Good luck in your decision!!