Need Advice: Should I Sell or Rent Out My Primary Residence?

[John Lee]

Hi all. First time caller. Long time lurker.

Could really use some advice. I'm absolutely torn as to what to do here. I live in Fairfax County (Virginia), in a nice area – about 30 minutes from Washington DC. My home (3bed/2bath condo) is worth about $300,000 and I owe about $195,000 on mortgage. I have about $100,000 in equity in it. The all-in mortgage payment is $1560. I could rent it as-is but would rather not - would rather not deal with the constant calls to fix stuff if its rented out. I will have to spend about $10k-$15k to get it "rent ready" – but I will be able to rent it out for $2000/month to maybe $2200/month. The $10k-$15k cost to upgrade is not an issue. I will also need to get a property manager. I'm afraid of getting sued so I was thinking of refinancing the home under a newly formed LLC (Probably Wells Fargo Commercial Real Estate Financing – I will personally guarantee the loan) and put the title under the LLC too.

My dilemma is, do I just sell and take the $100,000 now and put it in like an S&P 500 Index Fund or keep the property and take the $265/Month to maybe $465/Month Free Cash Flow – after all costs - and take advantage of all the tax deductions and depreciation, while the renters are paying off the property slowly.