Short Term Rent, Long Term Rent or Sell our 20 yr Home?

[Tim DeFor]

We refinanced our 20 yr home ($144K/20yr/2.75%) to pull out for down payment on 40 acres and a farm house ($58K on $290K purchase price) plus renovations. (We intend to subdivide the land for 10 additional acreages (3 acres per code), but that will be another post.) We are looking at selling our home with no capital gains ($30K after costs and loan pay off), short-term or long-term renting for a couple of years and either selling then (no capital gains) or long-term holding and continuing as a rental. Long-term rent would cover the new mortgage and a little more ($1,200 PITI). Short-term rental would need to cover additional items such as utilities, yard and snow, netflix/hulu, etc. Our upstairs has 3 beds 1.5 baths, kitchen, living room, large deck and yard, 2-3 off street parking spots. I believe the short term rental market for just our upstairs would be $120+/night. 20 nights a month would cover everything and leave a $600 cushion for Capex, maintenance, and cashflow. There are no other STR in our town that can handle more than 2 people (only double beds with a bath). We are willing to self manage either rental option. If we cashflow this property, we wouldn't need it for the other loan ($232K/20yr/4.15%), especially if we sell off some lots at market for $40K each. We are in a 3-5% annual property value growth area. What other factors would you consider?

[Jody Sperling]

This post is so dense, and you seem to have considered many, many angles. Perhaps it's time to go forward, and you just needed a fellow investor to affirm the work and thought you put in. Go for it, and good luck!