Corporate Relocation...Do I keep my house to rent or sell it?

[Adam L.]

So I'm looking to take a job that comes with a pretty kush relocation package. I'm torn on the idea of selling my house or holding it for a rental and appreciation in equity. Curious what this forum thinks.

Details below.

The House

1. - I live in Austin, TX. A hot market. Home purchased 2016 for $545k w/ 20% down. Mortgage=$3k/mo, $386k remaining @ 3.25% (includes property taxes and property insurance.), also no HOA.
2. - the home is in the NW austin area....Cedar park/Balcones/RoundRock/Leander area... Big plans for upcoming developments (Domain North) and employers (Apple Campus).
3. - The home is a 4br/2ba with a great yard, 1/3 acre, in an all 10/10 school district (BVS) (elem, mid, high), backing up to a golf course, so it feels like a bigger space.
4. - Zillow estimates currently @ $650k.

The Relo:

1. - pays sellers closing costs, including the full 6% realtor fees if I sell my house.
2. - pays the buyers closing costs, up to 2.5% if I buy a house at new location.
3. - I have up to 1 year to utilize the benefits, so I could totally rent out my place and then sell next year.

So any input here? Capturing that 6% sellers fee seems HUGE, but I'm worried that if I ever do move back to this neighborhood, I would be priced out and unable to buy in. I think I could rent out my house pretty easily in the $3k/mo range. How do I help make this decision?

side note: the new location is Boise, so another hot RE market.

[Steven Ko]

@Adam L. it seems like most people are forgetting about appreciation. Your home gained approximately 100k in 4 years. I don’t know if that’s something cashflow would have gotten you. David Greene uses this example all the time and more recently so on recent podcasts.

I believe Austin is one of the hottest markets.

Can you afford to pay for the Austin residence?

My parents bought their house back in 2002 in Sunnyvale, CA (next to San Jose/Bay Area) for 500k, now it’s listed on Zillow for 1.7mil and houses go for over asking here. They can comfortably retire now. What made it go up like crazy was the development of the new Apple HQ, their house is 1 block away. That news made my Parents property double. Not bragging but my belief is Jobs = rising prices. So if there really is development (and I know Austin is like “HQ2” for Apple) I like the idea of holding for the long run. IF YOU CAN ADDORD IT. No need to struggle.

You found your way to BP so I would hope your interested in becoming an investor. If you hold onto it, you can 1031 later. It might get messy timing wise with your relocation bonus but something for you to weigh.

I recently moved across the country from CA > PA and not that I don’t like my neighborhood, but my fiancé would have wanted something different. Do you know the exact neighborhood where you’d want to relocate too? Have you visited before? These are somethings renting can figure out for you. Just some food for thought :)