Rent or Sell My Current First House?

[Account Closed]

I have a house that Im considering either selling or renting and wanted to know what anyone thought on here.

Bought the house for $105,000 and still owe $91,000

Values have gone up in the area and it is now worth $170,000 + in the Arlington Texas area and similar rents look to be at least $1500 a month.

I want to get into real estate investing and have cash flow properties and don't know if it would be a good idea to rent it or sell it to get started. What would be the best way to go forward?

I also purchased this as first time buyer through FHA so I think I would need to refinance to rent it out and don't know what other considerations about buying another house I would need to think about and any information that would help would be greatly appreciated.

[Jonathan Holmes]

You do not need to refi as long as you lived there a year and a day. That’s generally considered the minimum a person can live in a house and not be considered in violation of the mortgage terms. You may need extenuating circumstances to purchase another property with another FHA loan.

As far as renting or selling it depends on your goals and your numbers. Add up the cost of your mortgage payment, taxes, insurance, vacancy, repairs, cap ex, and management if you will use it. Then subtract that from your potential rent. Be conservative with your rent estimate. If you have a positive number afterwords that’s your potential cash flow. If not then you won’t make money on this property. I use 25% of the rent as a rough and dirty number for repairs vacancy and cap ex.

My guess without knowing your payment and such is that this will be a low to no cash flowing property. That would make me vote sell.