Should I rent or sell home?

[Christy T.]

Hi everyone- Excited to find this forum in the hopes that you can help me decide if renting out my current home is a good idea or not. I am looking to purchase another home and move down the road. Current home is 3 years old with value of ~300k with 150k equity and mortgage payment of $920/month (includes taxes/insurance). Local rental rates look to run 1,700-1,800/month (maybe a little more). This would result in ~$830k of cash flow per month (before repairs, occupancy) or $9,960/yr. I am pretty sure, at least in the beginning, I would want to use a rental management company and I hear 10%/month is the norm. Home is located in a nice family friendly area with great schools. Since I will need to purchase another home, I will not be able to pull the equity out to use as a down payment, but I do have another ~50k set aside for this.

My current neighborhood has a number of rental homes now and they stay full but understand you cannot count on this.

If push comes to shove and things get really bad, I could tap into home equity to get out of a bind, if say I have a bad tenet and need to cover the mortgage on rental home for many months and the extra money from rental doesn't cover it all. But understand this is not ideal.

Thanks to everyone for reading and look forward to your comments!