Moving out of State - Become first time landlords or Sell?

[Jarrod Johnson]

Hello,

My wife and I are relocating to another state, and we are considering a few scenarios that come with it.

We are looking at a few options.

1. Sell House

2A.  Rent 

2B. Rent + Convert our detached building into a studio apartment.

We purchased a .5 acre 3/2 - 2002 home for 190k in 2018, and we have a mortgage payment of $1400 including PMI. It was appraised for 250k when we bought it. Our interest rate is around 4%.

Since purchasing, we remodeled the kitchen, new roof, painted the exterior, and are in the process of remodeling the master bathroom.

As with everyone, we like the idea of a tenant providing cash flow, and long term advantages that come with keeping a rental home. However, we do not ever want to move back into this city, and we would be moving across the country.  Some of the worries was having enough funds to purchase a new home if we kept this one, the hassle of owning across country while dealing with maintenance or repairs. I get the sense that it's a lot easier then we think with proper team or management company

We are looking to purchase a home in our new city, but we plan on renting an apartment for one year, until we can find exactly where we want to be.

2B details - There is a 375sqft detached building with it's own private driveway. After crunching the numbers, our estimates would be around 20k to convert this into a studio. It would have a full kitchen, W/D, own septic system. We have quite a few single friends who are looking for something just like this. It could be rented out around $1000.

It would be nice to be completely detached from this place, with a pocket full of money; but the pro's of owning a rental property is too much to not consider keeping it.

What are your thoughts? Thanks!