To sell or rent my current primary residence?!

[Vic Vega]

Hey Everyone!

So I know many will say to this question it depends on what your goals are which I totally understand. However, just want to get a little conversation going with some of your opinions.

So almost exactly 5 years ago I bought my home on short sale for $158k in excellent move in ready shape. It's been gradually freshened up and updated since I've been there and now has a value around $205k, perhaps closer to $210k when I plan to put it on the market in a few months. I'd comfortably say my home is on the high-end of my neighborhood value wise. I currently owe $113k on my mortgage. To sell or rent is the question. Average rent price is around $1,500-1,600 and I could get the high end possibly get just slightly more. I have a mortgage payment of $917 so great cash flow obviously. 

Of course if I sell I'd need money for 20% down (prob $40-50k) on my new primary residence. I have plenty of cash reserves in the bank but wouldn't really want to use that on my primary residence, rather use it on investment properties. Be nice to use profits from selling my home for a new down payment.

My concern with renting, which maybe it shouldn't be, is that my home is setup to sell so to speak. Just like someone who bought a property to flip does a little higher end rehab vs someone who rehabs a property to rent instead. So that be a factor in passing up my home as a rental?

If I sell my home, after fees and cost I'd likely profit around $65-75k. Around $50k of that would go to my new homes down payment and remaining $15-25k would be added to my cash existing reserves and available as investment capital.

Thoughts?

[Mike H.]

Keep it as a rental. When I first started and was listening to a bunch of real estate podcasts, there was one question that got asked a lot to the most experienced guests and the answer has always stuck with me.

Q: Whats the biggest regret/mistake you have/made in your investing career.
A: Almost invariably was that they regretted selling anything ever. And they wished they would have kept it all.

So if you need the 20% down payment, why not take out a heloc on your current home while its still your primary residence. If you owe 113k and its worth 210k, you can easily get up to 80% of the appraisal value. So 168k (80% of 210k) minus 113k would give you a heloc of 55k.

You have plenty of cash flow from the house as a rental to support the payment on that heloc. And if you can buy another house for your primary residence at the same numbers (i.e. 70% LTV or better), you'll end up with even more total equity and could then get another heloc on that one if you'd like to do more investing.