Just bought my first home should I sell or fix it and rent it?

[Carlos Baca]

I am very new to all of this but I just bought my first house in Littlerock, Arkansas. I got it for $10k and it will cost around $15k to fix it up. Should I fix it, sell it and buy another one or fix it and rent it out? Any suggestions would be really helpful thanks.

[Dan H.]

I do not need to see the numbers.  I do not want to be negative and therefore will frame this with some positive.

There is no way I keep that cheap of a house as a rental.  The expenses will exceed the rent.  The 50% rule is too aggressive at that price point.  Even if by some miracle the 50% rule shows any positive cash flow (extremely unlikely), it will not be enough to deal with owning the RE.

You have already purchased it.  Make it a nice (but not too nice) a home for someone, flip it, and hopefully get compensated for your effort (I suspect you will not be well compensated).  Use it as a learning item.  Take solace in knowing you have provided a good home to someone who needs a home.

Next purchase, perform the analysis prior to purchase, ideally have multiple exist strategies, plan for some unexpected items, and realize that its success is in part due to the lessons you learned on the first purchase.  

Do not get frustrated with this purchase or give up.  Use it to do better on subsequent purchases.

Good luck