Sell or Rent - How to Decide? Any help very much appreciated! :)

[Account Closed]

Hi everyone, I'm new around here and I would love to get some good advice on this.

I own a home in South Tabor (Portland) that I bought in 2010 for 240k, PITI is $1650.

I haven't put any money into the property to speak of, a few things like paint, new wood fencing, but not much. 

It is a very unique property in close-in Portland in that it has an oversized 2-car detached garage at the back of the property. It is more like a small barn because it is tall and very spacious at about 600 sq ft.

It is located on a very desirable cul-de-sac street with almost zero traffic - super quiet, safe and private. You can walk to Mt. Tabor park and other stuff people like such as cool restaurants etc. in about 15 min or less.

The house itself is a 2-1 with about 1000 ft, built in 1949. 

I inherited a house and have the opportunity to move and sell or rent this house but I am having trouble deciding. 

Looking at Craigslist, rents look very strong in this area with similar homes at about $2,000 plus per month. The location and the potential work/studio or vehicle storage space I believe would add to that number. 

Selling would bring a price of around 400k or higher. It's hard to find comps because a garage of that size is an extremely rare find around here.

If anyone has any tips on how to decide which way to go I would really appreciate it. I don't have much of an emotional attachment to the house even though I've lived in it for 5 years. I might be a little bit reluctant to let it go since it is not easy to find features like this house has. Although if the price was right...

Thank you for reading and I thank you in advance for any advice!

[Amanda Coleman]

If it were me I would convert the huge garage into an ADU and rent the main house and ADU. You could probably get $700-$1000/month for the ADU plus the the $2k for the main house. South Tabor will no doubt appreciate much much more in the next 5-10 years and the tenants you will get will be top notch in that area. If you sold for $400k, minus the $230k you owe, minus closing costs you would have roughly $140k to invest in another property (If you didn't do a 1031 exchange then you would have to pay 25%- 40% taxes on that as well, but let's say you did). It's really difficult to find cash flowing properties here in the Portland Metro area. You can also leverage this property to make other investments. I don't think anyone could pay me enough to get rid of that property if I were you.

The only way I would sell would be if you were comfortable investing out of state. In other markets you can probably do quite well with $140k but it's also a lot riskier if you are unfamiliar with the market and generally you won't see nearly as much appreciation.