Should we sell our current home in current market or rent?

[Nicalaus B West]

My wife and I bought a new house and will be moving in shortly.  We did not have to sell our current house and we can't decide if we should rent it out or sell it.  Here is some information:

• Appraisal Value last year: $80,500
• Comparable Average Sales past 3 months: $85,000 - $115,000 
• FHA Loan Balance: $62,000
• P&I + Insurance and Taxes: $496/month
• Water: $35/month
• Garbage: $35/month
• Bedrooms: 4
• Bathrooms: 1
• Lot Size: 7,200 sq ft
• Repairs needed prior to renting OR selling: 1K - 3K
• Parking: In back, no garage
• Rent Est. for this area: $1,000 - $1,200
• Schools: Probably the worst around
• Neighborhood: Getting better.  About 5-7 block up from a pretty bad area.

We've been in this house for 10 years and have re-done all wiring, plumbing, insulation, roof, siding, kitchen, bathroom, etc.  I like knowing everything about it and know I can fix anything that breaks.  

My wife, better half, thinks that if we can sell it for $100,000, then we should and take that money and use it for another property. She's worried about something big breaking and then dumping money into it.  Here is the rental report I made here on BP.

Thoughts?

[Brad Hammond]

Hi @Nicalaus B West, deciding to sell is always tricky.  Here are a few things to consider.

1. Problem or awkward properties are going to sell quickly now and be harder to sell in the future.  Is this a problem property?

2. Can you get a better return if you use the money for something else?  Possibly a small multi-family property? Run some numbers and see how it goes.

3. It sounds like you have replaced all the big-ticket items so there shouldn't be much else to break.  Knowing the property and where all the skeletons are is a big plus.  

4. Locking in more long-term debt and getting out of the PMI from your FHA loan could be a huge benefit.

Sorry if I made it harder for you.  I always lean towards selling and leveraging up to the next property as soon as I can.  Leverage is the biggest reason why real estate investing so attractive.