First off, I'm a newbie at this, and this is my first post. I've enjoyed reading a lot on this site, and I'm learning a ton. My wife and I own a single family home in a suburb of Nashville, TN. We've been toying around with renting it out and moving into an apartment to save money for a downpayment on a new home for us to live in. I have some questions about whether or not this is a good idea.
The house is 3br/2.5ba and 1850 sq ft. Our PITI on this house is $1400 and I'm hoping to get PMI removed, which will knock it down to $1200.
I've found about 10 comparable rental properties in the area, and they are listed (not necessarily rented) for an average of $2300. I think I could reasonably rent this property for anywhere from $1900 to $2100. (Zillow says $1900, but I'm not sure how accurate Zillow's rent estimate is).
To me it seems like a no-brainer to rent it out. Even on the conservative end of the rent spectrum with PMI still intact, we could net $500 / month, not counting any expenses or vacancies.
Here are my questions:
1) I'm assuming an 1800 sq. ft. house would take a little longer to find tenants for than a smaller house or apartment. I know it probably varies a lot, but how long should I expect it to take to find renters? Are we talking days, weeks, or months? This might be impossible to answer, and if so, I apologize.
2) We have probably somewhere in the neighborhood of $40K of equity in the house. Would it be a bad decision to pull out $20K of it to use as part of a down payment for another house for us, or are we better off just getting an apartment and saving up? My wife is somewhat nervous about pulling equity out, and the last thing I want to do is sell her on something and then it turn out to be a bad idea. Plus her dad is a former CPA and CFO, and is really conservative in his investments, and she respects him a lot, so it's important that I get this right.
3) What other key considerations am I not thinking about, or am I way off base in my rent analysis?
Thank you all for reading my long post, and for any help you can provide!
