Do I rent my home in New Albany, IN?

[Derek C.]

I currently "own" (mortgage) a home in New Albany, IN.  The house is the smallest house on a historic and sought after street in New Albany.  My wife and I are planning on moving within the next three months.  I would like to keep and rent out the property.  Being my first real estate investment I am unsure how much we could charge for rent, appropriate terms included in a leasing contract and any updates needed before a potential renter would move in.  My wife is also not sold on the idea. 

Brandon Turner suggests 12% ROI but I am confused on how to calculate since I am currently living in the house. He also suggests cash flow should be at least $200 per month. I currently pay $750 per month for my mortgage including taxes and insurance . My research, Craigslist and Zillow, suggests cash flow of $200 per month ($950) is at the top end of the market. Though I could not find any comparable rental properties on my street. The only other suggestion I found was Zillow's Zestimate of $1200 per month, which seems high.

A little more information on my house.  It was sold as 2 bed, 1.5 bath.  However, one bedroom was in the basement which has walkout door and one bathroom is a toilet next to the wash and dryer (no privacy). 

Any and all tips will be greatly appreciated.