New in Ohio - sell or rent?

Question

Hi, my name is Dan & I am in Barberton, Ohio. About to move to Madison and I am considering keeping my current house as a rental. I would like to get some advice to see if the numbers make sense.

Rents in the area go for about $750 per month (a few years ago a walked through a house up the street they were renting for 725. My house is very similar, but nicer kitchen, 2nd bath, bigger garage, nicer basement.

Monthly payment is 240 PI.

Taxes 141

Insurance (living there now) 88

Home would sell now for 60-70K.

I don't know if there is anything else I need to list, if so, I will provide it!

Thank you for your advice.

Dan

Account Closed · Answer

In your position if you have never been a landlord before Sell the house and use the proceeds to buy a rental closer to where you are moving so you can get your feet wet slowly. Especially if you updated everything in the house relatively a few years ago you don't want a tenant to mess everything up and destroy your property.

Sell >> Buy Rental Closer to new town >>>> Update the rental but very inexpensively >>>> Sit back and collect rent checks.

Daniel Urbancic · Answer

Thank you everyone for the replies. I would like to point out a few things that I was unclear on.

I will still be working in the town my house is in 3 days a week. If necessary I can come in town a day early or stay a day later to do any work on the house when it is requires. I will be staying in a hotel for my job anyway.

The house is updated, yes. But we were frugal when we did the updates (ourselves), and did not necessarily put top of the line things in. Before we sell or rent I need to replace the kitchen counter top (possibly adding a dishwasher?).

If I sell, I would love to use the money to buy another house as a rental, but that would not be in the cards. The proceeds would be used to build up savings, etc.

Does this change anybodies opinion?

Tommy DeSalvo · Answer

Welcome to BP! I would say with all the updating you've done to the property, it would be better to sell it, unless you can rent to a higher grade of tenants. If you do decide to sell it and buy a new rental closer to where you will be living, read articles like this and this.

Daniel Urbancic · Answer

About 42k is left on the note. We are about to close on our single family house in Madison.

We bought the house as a foreclosure 7 years ago, have done lots of work to it (new furn, water heater, windows). Almost every room has a total makeover-except the kitchen needs a counter. It will need a roof in the next few years.

Wouldn't it be difficult to get a note on a new property that we would not be living in, if we were to sell this for the equity and use the proceeds for another investment?

Larry Fried · Answer

@Daniel Urbancic

How much equity do you have in the house if it sells for $60-$70K? If enough you may want to use the equity to deploy in another investment property or a multi that you could live in, in Madison.

Also consider what renters will do to it, is it better sold to an owner occupier now, or is more of a rental condition home?

Daniel Urbancic · Answer

Yes, good points. I will still be in state - appx 1.5 hours away, but my job will still be bringing me to this town frequently. I would attempt to do any repairs myself - is that what you consider to be property management?

Thank you for your quick response.

Jonathan Wilks · Answer

If you rent you should figure vacancy, usually 10% of rent a month, Property management usually 10% of rent.

In regards to the sell of the home i would evaluate more of my long term, and short term goals and figure. what would work best for me. In addition on rather i would want to be a out of state landlord.

New in Ohio - sell or rent?

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