Big Picture - Renting out a home with equity advice

[John Seelig]

I'm sure this is in the forums already. I'm not good at searching apparently. Apologies.

We are modest W2 earners, 250k combined, I want to take my family home in San Diego worth around 700K, with 200K in equity, and rent it. Should I put it in an LLC? Would it be wise to heavily pay down the principal while renting? I'm currently living cross country and will probably utilize a property manager.

Thanks in advance!

[Mike McCarthy]

@John Seelig make sure it makes financial sense to rent your home. If you search some blog entries here, there are a few on why you should NOT rent your home. Well worth a read, though it obviously doesn’t apply in every situation.

The big thing is to ensure you are doing well financially (cash flow) and understand that a renter will not treat your home as well as you do.

In some cases, it’s worth actually selling your home and buying a more appropriate rental property - especially in a hot market like CA.