Updated over 8 years ago on . Most recent reply
Renting out primary residence to move out of state (back home)
Good Morning BP,
My wife and I moved from Massachusetts to Virginia last summer for a job opportunity. We bought a house 4 months ago but just found out we are expecting. She is currently in grad school and will be unable to work as of August of this year until graduation Dec 2018.
After analyzing all of our options, we determined that the best decision, both financially and emotionally, is to move back home to have family support with the baby while house hacking a 3 or 4 family as she finishes school (my RE goals is to BRRRR properties until I can supplement my salary).
Finding a job for me is no issue as I am a Civil Engineer. The issue we are faced with is trying to sell our house without taking a loss. We could sell if for what we paid, but then would be stuck paying agent commission (we used FHA with 5% down). We are in a prime location near a Navy base (20 minutes) as well as a Navy Shipyard (5 minutes), and 30 minutes from the Virginia Beach boardwalk. The house next door is actually rented out by 3 sailors which leads me to this question, would you guys consider renting out the house in the given situation? I'm debating on asking the sailors what they pay for rent so I can have a decent idea of what I could charge, but I'm not sure if that's appropriate to ask? The houses are identical expect for the fact that ours is a lot nicer and completely rehabbed.
Here are the numbers:
Purchase price: $160,000
Mortgage: $1030 (taxes and insurance included)
Proposed rent: $1,500
Property management fees (10%): $150
Cash Flow: $320 (max) - The house was completely rehabbed when we bought it so there should not be any major expenses, but I would still plan on setting aside at least $150 for small expenses/vacancies.
My thought is this: Even if I broke even or made a hundred bucks or so a month, its better than taking a $10,000 hit, right? My best friend lives 10 minutes away and could be my "boots on the ground"/Property manager. I would plan to sell the house in 5 years. Need your advice/opinion please!!
Most Popular Reply
I moved out of my SFR in Chesapeake in '07 and have no trouble keeping in rented. Like mentioned above, there are always folks moving in and out. If you rent to a group of sailors, I suggest using 1 lease for all. Relationships sometimes strain and roommates move out and we military members get that nice little military clause to break a lease when we get orders. People produce fake orders. Fact.
If the house is nice and in a desirable location, you shouldn't have many issues renting to a family, military or not. Just my $.02.
Good luck and congrats on the baby.
John