Help crunching numbers for renting my primary home

[Chris B.]

I need to post to the New Members introduction forum but thought I would dive in here and ask for some help.

My wife and I became accidental landlords in 2008 and honestly have kind of been on cruise control without doing much numbers crunching. With a growing family we have decided to move out of our primary residence and into the rental as it is bigger and within a better school boundary. Now I am trying to crunch the numbers on the primary home and see if we should sell or rent. Below are some details:

Home purchased in 2004 for $180,000. Currently owe $120,000 at 4%. PI payment is approx. $615/month. Taxes/Insurance work out to approx. $288/month. Using our current rental as a guide I have estimated (conservative in my belief) $450/month in expenses (garbage, minor maintenance, and ~$5,000 in surprises). Leaves me with $122/month if I rent for $1475. 

Home is a restored craftsman bungalow with hardwood floors, basement for laundry and storage, detached garage and yard. Other 2/1 SFR rentals in the area are going for $1375 - 1595. The home is pretty much 100% updated with new elec., plumbing, furnace, bath, kitchen all within the last several years so that is why I think $5,000 in maintenance is an over estimate. We will also be living only 2-miles away and I fixed up the house myself so think I can handle (and will be OK with handling) most repairs or maintenance. Yard is pretty dialed in and feel clean-up a couple times a year being all that will be needed.

Rental market is Portland, OR and we are in a very family oriented neighborhood (not necessarily the most trendy close-in). I know things can change but I am not worried about vacancy in the current market.

My real estate agent estimates a conservative listing price of $290,000 if we were to list (he is drooling over this property so has been very actively courting us). I think a hair over $300k would be closer to reality in the end.

What are some gut reactions to the numbers? Right now my gut is saying rent for 2- 2.5 years and then reevaluate as I could always sell before year three and not get hit with capital gains.

Thoughts? Advice? What am I missing in my evaluation?

Thanks so much.

Chris