Sell or rent guide for primary residence

[Arpit Patel]

I live in Folsom, Ca.

Bought house 6years ago for 575k, and currently valued around 850-875k, its 20 years old house.

We are thinking of moving may be to different state.

Can't decide whether to sell or rent it out? I can get about $3500/month of rental income, good schools, good area.

Only worried to manage or pay for property management and manage it remotely for 20 year old house. 

Any advice on decision?

[Drew Sygit]

@Arpit Patel

You have a challenge as your property is probably a Class A property. These tend to hold their value the best in downturns and appreciate the most in rising markets. They just don't cashflow well!

Why? Because if you were to graph rents versus property values in any market, you would see that rents don't increase in step with property values.

A Class B property will usually cashflow more than a Class A, but not as much as a Class C.

So, you have to decide if you want to accept lower cashflow with your Class A property and bank on making most of your money via appreciation - or- liquidate and use the money to buy Class B or Class C properties with more cashflow, but usually less appreciation.

You should also be aware that tenant issues increase as you go lower in demographics A => B => C.