Thinking Renting My House Out

[Clint Nelson]

I am thinking of renting my house out, and buying another closer to my job since real estate prices are a lot lower there than where I live now. I am just hoping to get some advice from some more experienced investors. My current mortgage is right at $1200 a month, and my house should rent at the lowest for 1400, most likely $1450. I really don't expect much positive cash flow from this. These are the main reasons for considering this:

1.A long term investment of the tennant slowly paying off my mortgage.

2. Gaining interest on my house that is appraised at 145,000, over a number of years if it only averaged 3% a year, in 24 years would value at 290,000

3. The tax benefits, I am taxed at around 30%, and I could see about a minimum of $15000 in write offs between interest, taxes, depreciation, maintenance, etc.

4. Eventually the rent should keep going up, and the mortgage should stay the same maybe reduce, when the PMI is down is down to 20%

Those are my reasons, I am just looking for someone with more experience to say if it looks like a good idea. I am also wondering how much I need to have in store of cash to cover what rent may not. I am also considering having a property management company take it as most cost 10% percent of the rent, wich is also tax deductible, so about $100 a month not to be on call 24/7 for the tennant seems like it might not be to bad. I appreciate any help you can give me.

Thanks,
Clint