Home Owner Looking to Rent (Possibly) question

[Jake Colstad]

Hey everyone - Sorry if this has been asked before, but please bear with me.

I am a homeowner looking to buy a new home, and rather than sell my current home, I'd like to rent it out. We are in Central Wisconsin (Wausau).

My current home is a 3 BR 1.5 bath ranch style home, about 2500 sq ft, 2 car detached garage, walk out basement. This is our first home, so we were brand new to everything. We put $10k down, and have a ~$85k loan. Our mortgage is about $730/month. We think it would sell for $100-105k. 

Would it be better to sell our current home? Rent it? We've thought about selling and just buying a duplex to start our real estate journey, but haven't bit the bullet yet.

Any words of encouragement? Ideas?

Thanks!

[Hussain Harun]

Hi Jake,

It seems like you want to buy rentals in the future so my thought is that if it makes sense to rent it, then rent it because that'll just be an extra unit in your portfolio. The problem is that I"m gonna have to agree with Greg and say that it probably won't be a profitable rental. I don't know much about the Wausau market but I took a gander on craigslist for 3 bedroom places available in your area and it seems like im seeing between $650 to $1100 per month. Even on the higher end of the spectrum, you'd only be leaving yourself like $300 give or take for vacancy, repairs/maintenance, and capital expenditures (assuming your $730 payment includes taxes and insurance) to break even from a cash flow standpoint....

My initial thought is it will not make a good rental but if I were you I would use the rental calculator here on bigger pockets and see if you can get a more accurate analysis. For estimating rents I like rentometer, craigslist, zillow, and asking other renters in your neighborhood.  

Good luck!

-Hussain