Rent 1st home to enter REI?

[Kevin Jorgensen]

Hello,

I'm quiet new here, am interested in REI, but am at a crossroads and am ready for advice.

Classic question: Do I rent my home, or sell it? 

Based on the allpropertymanagement.com rentVSsell calculator, it falls on the "Rent" side of the fence.

I'm in the 97007 area code, with a house that's 11% above the median in a 'cool' market (according to Zillow - but it's nearly December, who buys houses in December? I digress). 

I foolishly bought in in June of 06' on an 80/20 100% finance loan for the 345k price.

As far as now:

- Loan at 4.25%, with remainder of $178,000

- zEstimate is $424,000

- Taxes suck at $4,400/year

- Monthly Rent zEstimate = $2,100

- zEstimate appreciation of 5.6%

I'm not keen on being a landlord, so would be interested in having PM done.

Between my wife and I, we have an income well over 200k, so either one of us could float the costs on this home if it were to go unrented.

(There happens to be a much more new home in the neighborhood also up for rent, but seems to have been this way for some time now, which concerns me, but I've yet to look at what they are charging rent)

Any good direction/advice on this I'd be keenly interested in.

Regards,

Kevin

[Scott Radetich]

Not sure Foolishly bought is the correct term here. You put how much down? that's right $0, and you are now up 79k (based on Zillow which we all know isn't always accurate). Can someone calculate that ROI for me? You needed a place to live, got some tax breaks now you have the chance to pull a few hundy out and do some real damage. Man do I miss those zero down loans!

After reading this post it sounds like you aren't really looking to do much real work when it comes to owning properties.  Have you looked into Turn Key providers?  Jason Hartman, has some pretty interesting products.  Listen to a few of his podcasts, it will get you thinking (he'd say sell).

as a side note, I've been pondering trading in my Portland properties. I've been told by a few real, real estate investors I need to sell all of them. But I can't pull the trigger, i'm just too conservative of an investor (and I also have a real job like yours so there's the my time factor as well). But recently, I pulled out some equity on one of them and purchased some additional properties. My goal hasn't been to be 100% into REI, I like my job and am in no rush to get out of it. But in 10 years... I'll be able to choose which direction I want to go.

 If you want a conservative suggestion that will go against a lot of investors opinions on this site, I'd cashout refi that home now as owner occupied, buy a single family rental in Portland, then with the money left over buy a new primary for you and turn your 1st home into a rental too.  Keep in mind, both of those rentals you will make very little cash flow (couple of hundred at best) but your income is high enough to where I'm assuming you don't need it.  Now you'll have three homes in Portland with potential for appreciation over the next 10-20 years and have someone else paying down the mortgages for two of them. Its a solid plan, but won't get you rich quick.  If you want to get there quicker, you're best to sell and you're going to have to buy something that requires a lot more work....