Should I sell or rent

Question

I am not sure if I should sell my first home and rent it out? I currently rent with my wife we just welcomes our third son who unfortunately has some medical problems. We bought out first home about 10 years about for 250K, We have 168k left on the mortgage can can probably sell for 325k+ I was trying to use some equity to consolidate some debt and pay some medical bills but that that proven difficult. My bank account number was stolen about 1 and a half years ago and if messed me up financially for months. I ended up misses some payments on some things and my credit took a hit. I am current with everything now but those missed payments have come back to haunt me. My goal was to use some equity and them rent it out for additional income. But I feel l like if I can make 150k + selling it I should. Then then use that for my original purpose then them use the remaining to buy a nee home down the road. Any input would be greatly appreciated.

Sherief Elbassuoni · Answer

If the mortgage is 1250 a month, and you can rent it out for 2200-2300, this will get you a solid cash flow.

You can keep it and start paying your debt out of the cash flow

Ari Friedman · Answer

Good advice so far. Also think through taxes as far as cap gains exemption goes. If you have substantial appreciation may want to sell it to lock those in.

Ray Hage · Answer

I would try to keep it if possible and get the HELOC. You may have to try many lenders if your financial past is a bit checkered. House prices are high now and transaction costs are not that low either. I am leaning towards holding it.

Do you have another cheap or free place to live in the meantime? In a case like that, you could make a good argument for renting out your place andgetting that cashflow.

Steven Foster Wilson · Answer

That will be great if you could. You'd never know when somebody will have a better offer unless you ask. Keep communicating with those lenders. Hopefully, you'll find somebody that will be able to help with the conditions you prefer. All the best!

Steven Foster Wilson · Answer

I personally like to hold my properties as long as I can and as long as it makes sense. Can you refinance or do a HELOC? Would you still get cashflow if you did that? I would honestly call as many lenders as you can to see what options are out there. The more you ask the more options will come your way.

Michael Diossa · Answer

Deciding whether to sell your first home or rent it out can be a complex decision, and ultimately it depends on your financial situation and goals. Here are some things to consider:

• Financial stability: It sounds like you've had some financial setbacks in the past, so it's important to make sure you're in a stable financial position before making any major decisions. If you're struggling with debt and medical bills, it may be best to sell the house and use the proceeds to pay off those expenses.
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• Rental income: Renting out your home can be a great source of passive income, but it comes with its own set of challenges. You'll need to find tenants, deal with maintenance and repairs, and potentially navigate landlord-tenant laws. It's important to do your research and make sure you're prepared for the responsibilities that come with being a landlord.
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• Market conditions: It's a good sign that you can sell your home for a significant profit, but it's important to consider the current real estate market conditions in your area. Are homes selling quickly? Are prices going up or down? These factors can impact how much you're able to sell your home for and how long it might take to find a buyer.
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• Future goals: Finally, it's important to think about your long-term goals. Do you want to buy a new home down the road? Do you need a source of income to support your family's needs? Selling your home now could give you the financial flexibility you need to achieve those goals.

Overall, it sounds like selling your home might be the best option for your current situation. However, it's important to consider all of the factors above and consult with a financial advisor or real estate professional before making a final decision.

Adam Laurenzo · Answer

Questions that would help me make that decision, if I were in your shoes:

- What would it rent for?

- Do you want to be a landlord?

- What does a potential HELOC or Refi situation look like?

Without good answers to those questions, I'd lean toward selling.

Ash Hegde · Answer

Great news with the update Scott! Hopefully they are awesome tenants for you!

Scott Rovner · Answer

UPDATE!

We have found out first tenant. income and credit are great. The were even willing to paying 150 a month over asking. They move in 7/1/23. This is extremely exciting. I should u be cash flowing about 1100 per month. I just want to thank everyone for all there words and advise thought this.

Scott Rovner · Answer

OK, We have come to a final decision. We are going to put the refi on hold for now and rent it out. I should be able to cash flow 1000+ a month> we will use the income to pay down some dept and medical bills. In the end keep the property was a must. He can make money off it forever and it and fund other things going forward. Thank you all for your thoughts and advice.

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