Renting vs Selling

[Jorge F Rodriguez]

• Hi, I am planning to move to Tampa and I would appreciate some advices whether should I rent or sell my primary residency before leaving? 
  
• The house is townhome, located close to Lake Nona, build in 2022. Great amenities included with HOA.
  
• Here are some of the numbers. 
• Mortgage, Taxes, Insurance, HOA: $3040.37
• Estimated rent: $2475
• Total Expenses: $3660.12
  • Vacancy (5%): $123.75
  • Repairs (5%): $123.75
  • Capital Expenditures: $100
  • Property Management (11%): $272.25
    
• Information when I bought the house in 2022, new constructions 
• Purchase Price: $373000
  
• Purchase Closing costs: $4662
  
• Current home value: 400k-420k

Cash Flow: $2475-$3660.12= -$1185.12; -$71107.2 at 5 years

Cash on Cash Return on Investment (CoCROI): 0%

Appretiation per year (6%); $535,290.23 at 5 years

Equity: Loan value $345,089.53 at 5 years; $190,200.47 in equity at 5 years

Loan Value today 6/2024: $368,201.59

Total ROI in 5 years= (Total profit/Total Invested capital)/ Time (in years);

• Total profit: $190,200.47
• Total Invested: $71107.2 (neg cash flow) + $42757 (closing sale costs)= $113,864.20
• Total ROI (5 years)= ROI 67%, annualized ROI 10.8%
• 
  My biggest concern is that I am relying solely on appreciation and assuming will appreciate at 6% per year. 
  

[Frank Barletta]

@Jorge F Rodriguez

Sell that as soon as you can.

A negative investment is not a good investment.

6% is unlikely, so you'll continue to feed the bank and lose out. I wouldn't hold any longer, so write off as much as you can.

Wishing you the best.