Should I rent or sell my home?

[Mike Cruz]

Hi everyone. I want to know what I should do.

Bought my home for $312k. Values in the neighborhood are btwn $490k-515k. We owe aprox $235k with a balloon payment at the end of $57k. (We had a hardship modification about 6yrs ago)

Current mortgage is $1800 and we have family members that say they would rent my house for $2300. I would pocket that money for upgrades or repairs or even put it towards the mortgage to get it paid off faster.

We would be moving out of state and staying with family members rent free for at least a year til we buy another house or decide the move wasnt for us and we can move back to our original home. Were torn on the issue because we like the idea of having passive income and having property that we can possibly pass on to our kids to get them started on building wealth or buying their own home if they want to sell our house. Pls advise on how you would navigate this.

[Sean Barnebey]

In my honest opinion I would rent the home. Especially considering it is family (hopefully family you can trust) you have the benefit of having tenants in the home that will more often than not, be taking care of the home better than most tenants would. After expense you should have some decent cash flow, as well as the back up plan of moving back should the move not work out for you. Additional equity in your home is always great! However, if your balloon payment is coming due soon I would seriously consider selling or at the very least inquiring about a refinance with a mortgage professional. Rates are still good (probably not as good when you locked it down a few years ago) and with the additional appreciation you should have good equity as well as get solid terms. Plus, lenders often look at all income when it comes to approving you for a mortgage and a cash flowing rental would be supplemental income that could help you get better rates should you decide to purchase a home in your new market.