@Laura Johnson I think those numbers sound good on the surface, but consider this for a second. If you have single family home with a mortgage payment at $1,100/month (sounds like you used an FHA loan), you probably purchased your home for less than $215k. I would guess you have owned it for a few years as well. The average home price in Cedar Hills is close to $470k today (depending on where you are at exactly). If my estimate is correct, that means that you would have over $250k equity in your home.
Now to break down your deal. Best case scenario, you are bringing home $600/month (not including, vacancy, repairs, capital expenditures, management, and maintenance). That could mean that you are bringing home less than $200/month in all reality. That means you are making $7,200/year on your $250k equity in your property. The return on that ($7200÷$250,000) = 2.9%. History says that you can do twice that in your average mutual fund (6%). Granted, there may be benefits to holding that property in that location, we may see significant amounts of appreciation in the Cedar Hills area, but who's to say. If you are looking for the best return on your $250k investment, I would probably look somewhere else.
If you liquidated your asset and used your equity to acquire another home for under $325k using an FHA loan, that would leave you with ~$230k to invest in another property that could yield a better return on investment. $230k can go a long way, you could buy a million dollar apartment complex with almost 25% down. If you could do 12% on your investment (not all that uncommon in real estate, thought it may be difficult locally), you could be making nearly $28,000/year. There are lots of ways to look at the property, but I would definitely make sure to consider all your options, before settling on renting that property.
