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Updated over 7 years ago on . Most recent reply
![Jarrett Mitchell's profile image](https://bpimg.biggerpockets.com/no_overlay/uploads/social_user/user_avatar/184710/1621431701-avatar-radykall1.jpg?twic=v1/output=image/cover=128x128&v=2)
How to know if you're in a good position for a rental
So my situation is interesting at this point. My wife and I are moving from Nashville to Atlanta, and we bought our first house last year. We were planning on living in it for 5 years and renting it out, but that plan has obviously changed. That being said, we kind of overextended ourselves trying to fix it up, and we just got to a point where we had to stop, because our cash reserves we severely depleted. Now that we are moving, we want to keep it and rent it, since we've updated so much, but I'm concerned that we may not be in a financial position to do so, being that though my wife is getting, a raise, I'm having to take a cut. Here are the numbers:
Bought for: $177,00
Renovations total : $32,000
Additional repairs needed to rent/sell: Approx. $4000
PITI: $1105
Potential Rent: $1650
True Cash flow after expenses (Vac. CapEx, Expenses, Management): approx: $50
Potential Realistic Sales price: $235,000
Net after transaction costs: $42,000 (before debts are paid back)
Cash Reserves after move: Approx. $2000
We will be staying with my parents for a while, so I won't have housing overhead expenses, but we would still have the debt payments, making it even more difficult to save. But I have to be honest and say that there's both a part of me that feels like rebuilding my cash to invest in Atlanta is a better move because I can get a true investment where I run the analysis beforehand for a good deal. What makes it a difficult decision is that Nashville has been booming lately, and I'm sure over time, my house will be much more valuable.
Would you keep an out of state rental with low reserves? Or would you sell, keep some reserves, and reinvest the rest in your back yard. I'd love to hear your thoughts.
Most Popular Reply
![Michaela G.'s profile image](https://bpimg.biggerpockets.com/no_overlay/uploads/social_user/user_avatar/153554/1621419807-avatar-michaelaatl.jpg?twic=v1/output=image/cover=128x128&v=2)
sell and then buy in atlanta. Not that great a deal for rental.