First time LL / Property Management Company

[Tyler Barton]

Hello everyone! First post here on BP.

To quickly summarize, my wife and I are in our mid-20s and about 9 months ago bought our first home in Fort Worth, Texas. We've spent about 15k on renovations and have absolutely loved every aspect of it. With that, we definitely have the itch to research more on being a landlord, renting out our current property and buying another within the coming year being in Texas or Georgia if we choose to move.

I have recently been proposed an opportunity to relocate to Georgia. With that being said, I absolutely do not want to sell our house in Fort Worth. The area is quickly growing and based on neighborhood comps our home has already increased around 20-25k in value based on what houses on our street are currently selling for, this week! Plus, it is security that if we don't like Georgia, we can always move back :) 

The advise I am looking for is:

1 - Because we only put 3.5% down on the home, what we can rent our house out for, after property management fees and mortgage cost we would make $0. The purpose of the renting out factor would be principle pay down and property value increase over time. I suspect with property increasing around 10% per year, that alone comes out to around $2,000 per month gain, give or take. Does this sound like a dumb idea to solely rent the property out for principle pay down/property gain? Like I said, I would profit nothing by doing so. Of course any issues that arise would come out of my pocket, which I anticipate and have an emergency fund built up.

Thank you in advance!
Tyler

[Lake Lutes]

Hey Tyler! Great post/question. I think it depends on your risk tolerance levels and how good of shape the home is in. Is it going to need big capital expenditures or fixes in the next 1-5 years (roof/HVAC/appliances/etc.)? Because if so, you are not putting any money aside for these expenses through cashflow, and could be put in a situation where you're coming out of pocket and wiping out any monthly appreciation gains pretty quickly. In addition, be sure you're factoring in property management fees to get to your "$0" monthly figure. If the home is in good shape and you don't anticipate any big fixes until you move back, perhaps it could work out well for you. Finally, if your risk tolerance is low, the stress brought on your life could potentially outweigh the gains. If it sits vacant for a month and you have to eat ~$1500, or a big expense comes about putting you deep in the $(-), that might hurt. Both sides have + and - ! Best of luck to you in Georgia!