Try to sell or Rent?

[Hayden Stovall]

Hello all! I am currently stuck in a sticky situation! I am 22 years old and currently active duty Navy stationed in Georgia. I will be separating in the next few weeks and moving back home to go to school. When I first got stationed here (March 2016) I was expecting to be here for at least 2 years, but do to my orders I will be separating in July. I bought a house using a VA Home Loan because in the end it was cheaper than renting. Therefore I bought the house for $112,000 which came out to $114,000 VA Loan. My mortgage payment is $725 which includes my insurance. We got news very sudden that I'd be separating (about 3 weeks ago) so we threw the house on the market. As you can tell I've only owned the house for a year. My wife doesn't want to have to rent it out but we can't afford to make the mortgage payment for very long if it doesn't sell. We'll be mov my 1,200 miles away back to Texas. So for this being my possible first deal, it's not really what I wanted being that I'll be 1,200 miles away. If we were to rent it out we'd have to rent it for $1,095(near top market rent). Accounting for 10% PM, 10% Vacancy, 5% Repairs I,d come out with about $95 positive cash flow. So I guess my question is, does anyone have any advice on if this would be a good deal? Or one that a newbie investor should do? I hope this all makes since. Thanks in advance.

[Jacob Seaquist]

Hey Hayden,

It sounds like you have quite the decision ahead of you. I am former military myself and purchased a home while still in Iraq back in 08'. I house hacked until 12', then grappled with a similar decision to sell or rent when I moved about an hour away. (No where near the distance your talking about...) I decided to rent and now have 4 SFRs in the same market.

Being that you wouldn't be managing it yourself and the distance involved your in a tougher position. If you have a friends or family in Georgia you could hire PM and have them keep an eye on it? Having that ability to not pay a down payment due to the VA loan, using that leverage is a great start! Now depending on how much you can sell it for it may just be easier to take whatever gain you can get and start closer to where your moving. Use the VA loan to buy a duplex, triplex or fourplex and not have to put a down payment again. Maybe use the gains from the previous sale to start a savings fund or improve a property in need of repairs?

I feel like a may not have helped much but I'll leave you with this. Expenses go up and if your numbers aren't on the low side you may not have left yourself much room to even break EVEN if something does break (Furnance, AC...other appliance) then your a 1000 miles away and not able to make hard situations easier due to proximity. If it were me I'd sell and take my talents to the longhorn state. Good luck. Let me know if I can be of any further help down the road! 

-Jake