Rent or Sale, first investment home?

[Lydia Woods]

Hey Ladies and Gentleman, I have a question. I purchase my first investment home in February 2017, I remodeled and it’s looking good. I put it on the market in August, been having some people interested here and there. But nothing definite. The home is listed at $85k I have total of $38k invested in it (include purchase of home and remodeling). A lot of my money is tied up. I’m thinking if it don’t sell by December to go ahead and rent it out, which will be an easy $1,000 - $1,200 a month. What’s y’all advice and experience ?

[Thomas S.]

I would continue to concentrate on selling the property. If renting was not your initial plan do not be too quick to change your plans. Renting could work but do not by any means consider it "easy". Being a landlord is not like anything you have likely experienced in the past, it is far from easy at times.

Biggest problem will be your ability to pull your equity out of the property if you decide to rent. You can not leave it there otherwise it will devour your cash flow and leave you unable to move forward with other investment opportunities.

A property having 85K in equity will consume the first $700/month of your rental income. After factoring in all other long term expenses on the property you may be left with very little actual positive cash flow from the property itself. Your cash would be better used elsewhere making it essential that you bring leverage into play.