Selling or renting after moving.

[Daniel Gutkey]

Hello all,

I purchased my primary residence about 5 years ago, and due to work (Military) I will be moving in September. I plan on buying at my next duty station (Boston, MA) and had been planning on keeping my current residence to rent with the possibility of moving back here in 3 years (Jacksonville, FL). But as I get closer I'm not sure if I should rent or sell. I purchased for 315,000 and have 285,000 remaining on the mortgage. The house would likely sell around 500,000 (3.5% APR) The rental rates in Jacksonville have fluctuated a bit the past few years, my total mortgage payment is 2600, similar homes are renting for about 2500-2750 in my area which has me thinking about it more as a liability than an income producing asset. I am also looking into buying investment properties on a smaller scale in some cheaper markets and I'm wondering if my equity would be better suited that way. Just looking for opinions and advice.

[Lien Vuong]

Thank you for your service! 

This is quite a common scenario but not knowing some more intricate details of your situation, I would recommend for you to proceed with a sale as the your monthly rent would not be sustainable to cover your mortgage and repairs/maintenance as well as management fees. Perhaps you can explore a STR strategy to get more $ but I'm not sure if you'd want to manage it remotely like that. Now doing math on a sale of $500k sale - $6-8% transaction fees would net you $460 on the lower side with a total of $175k in your pocket when you walk away. Thats a very hefty return for 5 years of growth and it is TAX FREE. You can now deploy that cash into a 4-6 plex in another lower cost state and get much higher income out of it and rinse and repeat after a few years. You would have a purchasing power of roughly $650-700k with 25% down with extra reserves.

Congrats on your growth and I'm sure you'll make the right decision for you.