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Updated almost 9 years ago, 01/20/2016
Thinking of renting my personal home once we move
Hello everyone,
I am trying to figure out if it make sense to rent my home once we move. I got a 0 down USDA loan. We have been in the house for 3.5 years so we do not have much equity. I was thinking it would not make sense if we sell in a year or so because by the time I pay closing I will not be walking away with much money. I figured if I could rent this property and cash flow a little, it would be better than selling and making hardly anything. Below are the numbers. I don't think the 50% rule gives a fair estimate as I just replaced the AC a year ago and the roof has a while until its lifespan is over. Those seem to be the big hitters. The house is in a nice neighborhood close to great schools. House was built in 2003 1600sq ft 3bedroom 2 bath. This would be my first rental btw.
Thanks for the help.
Purchase price | $160,000.00 | Current MV 163000 | |
Down payment | $0 | ||
Closing cost | $3,500.00 | (rolled into mortgage) | |
Total Mortgage | $163,500.00 | 3.25% | |
Mortgage balance | $153,000.00 | Approx 10K inequity | |
Rent | $1,250 | ||
Monthly mortgage payment | $705.00 | ||
Taxes monthly | $50.00 | ||
Insurance monthly | $150.00 | ||
Vacancy | 8% | $100 | Area normally has houses vancant for 2 weeks or less |
Operating expenses | 10% | $125 | |
Cash flow | $120.00 | ||
Using 50% rule | |||
Rent | 1250 | ||
Expenses | 625 | ||
Mortgage | 705 | ||
Cash flow | -80 |