Should I Sell or Rent Current House?

[Alex Hoffman]

Hello all,

My Fiance and I own a home together in a small suburban town south of Dallas. It was purchased 4 years ago (new build) 3BR /2 Bath (plus study) for about $203k and we recently just refinanced the home for a nice interest rate of 3.75 @ 195k over 30 years. The mortgage is $1500 (with taxes) and home insurance is about $100/month, HOA $30/ month. All that being said, the house is now appraised at $292k (100k equity) and rent for it is likely 2000 - 2100 / month. There is relatively small minor fixes that need to be done but overall its in good shape and doesn't need much repairs. So therefore, my expected cash flow is around $400 / month before setting aside money for maintenance/vacancy costs.

We are thinking of renting this house out or selling - but having a tough time deciding what is best for our situation because we have recently put a down payment on new build home 10 minutes away. We have always wanted to become rental property investors and thought this would be the perfect opportunity to start, but would love to hear some feedback from the community. The new home is $638k and we would be putting down 5% (FHA loan) if we decide to rent our current house. Or would it make sense to sell and get our 100k equity and put down a larger down payment to avoid interest costs over time. Of course the mortgage rates are escalating rapidly in the 5% range now and I am afraid they will get higher by the time we close.

If anyone has any feedback for me and can lend some advice, that would be much appreciated! Thank you so much!

Alex