Should I Rent or Sell

Should I Rent or Sell

Member since 2018 · 10 posts · 4 votes

I am new to BiggerPockets but excited to learn and grown my real estate knowledge!

My wife and I both had houses when we were first married.  We ended up moving almost immediately after we were married and decided to sell my house but kept hers as we thought it had a higher ceiling from a rental perspective.  It has been 3 years since we left and we've been lucky to have some friends stay in the house who paid us some money but nothing that I would constitute as rent to appease an investment property.  Our friend is getting married and will likely be moving out and we are stuck with the question of to rent it as an investment strategy or sell and begin our real estate pathway closer to where we currently live.  I have looked at various investment calculators to determine if it would be beneficial from a cash flow standpoint - but they all are based on purchase, down payment, etc and don't quite fit with our situation.  

On the one hand, as long as we aren't significantly losing money on a month to month basis I feel it best to maintain the property purely from an appreciation standpoint (strong location close to the a large medical center) with an dramatic increase in housing.  

I can provide specific numbers and figures if anyone is interested, but a quick breakdown of figures pending the rental income I believe is a good price (lower than a rental analysis I had done on the property) - we would come out essentially even annually or maybe barely in the red (if we are conservative with savings for improvements, maintenance, emergencies etc). 

I'm hopeful the community can help provide some advanced considerations for the best strategy moving forward. 

Thanks and I look forward to any advice people are willing to share!

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  • Real Estate Broker · 3412 S. Harlem Avenue Riverside, IL 60546 · Member since 2015 · 6k+ posts · 5k+ votes
    6y

    @Adam Sieg the answer to your question is what is your return on equity? If you have 200k of equity for instance, can you make a 20k gain (10%) when considering cash flow and appreciation? How about a 5% gain? Figure this number out and compare it to more passive investments (mutual funds, etc) and you will have your answer. 

  • Member since 2018 · 10 posts · 4 votes
    6y

    Thanks John!

    I hadn't thought about it specifically in that context but it absolutely makes sense.  Thank you for the insight.

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