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PaperclipPerfector  11d ago (text post)   2746 thread views

Small-Scale Question Sunday for May 12, 2024

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I have effectively made the decision to move out of my home in the middle-class Dallas, TX, suburbs into an apartment in the fun part of town. I am debating whether I should rent the home out or sell it and would like advice and/or experiences from my fellow Mottizens. I am leaning 75/25 in favor of selling given the thoughts below.

Background:

  • 26 year-old male in committed relationship that I expect to result in marriage. We would not move into this house together if we got married.
  • Home is appraised at $380k and has a 30-year mortgage with 3% rate. Monthly payment all-in is $2200 and expected to go up due to property values increasing.
  • Home is in a socially "meh" area with meh schools and stroads galore

Pro-sell thoughts:

  • I do not have the time to manage tenants unless they are truly very quiet nor am I willing to risk getting shitty tenants and having to deal with them
  • I can simply pocket the cash and have peace of mind about not having to worry about the house and its illiquidity, tenants, etc.
  • I am moderately risk-adverse when it comes to money and investments and it can cause me stress. If I were to move to an apartment and have a vacant home, my combined mortgage and rent would be about 80% of my post-tax income. (I have plenty in a brokerage account that could cover me, but I don't want to sell that.)

Pro-rent thoughts:

  • More equity: I do not care about making a large monthly profit off of the house (maybe $100-200/mo to pay for emergencies), but rather building equity so I can get more money when I eventually sell
  • Property management companies can, but not always, do a good job of not letting anything make it to the homeowner (from what I've read)
  • If I get lucky and find excellent tenants, I can treat them very well to increase the likelihood of them staying (but this is still risking it)
  • My area's real estate market is relatively in-demand with little sign of slowing down (not including reasons that affect all U.S. cities), which may allow me to sell a bit quicker than other markets, especially if I sold for below market value (which I'm fine doing if absolutely needed)
  • 3% interest rate is very good and I suspect we won't see that for a long time

If it's about money, how about staying in the house and getting housemates? (I assume the house if big enough for that - I don't know DFW market but $380k sounds like it should buy some decent space?) Once you marry and ready to start that adventure in a new house, you can sell this one, or keep renting it out - by then you'd know if it works for you.

I do have housemates now which has substantially helped with paying the mortgage (and I’d recommend to any single person with a home!).

I want to move to area X because a) I like the environment, and b) that’s where I spend a lot of my time, allowing me to save an estimated 100 hours per year of driving (one-hour round trip twice per week). Housemates don’t help this much, even if I save a bunch of money.

If you currently have housemates (presumably already vetted), why not just continue to rent to them? Increase their rent as necessary to cover your expenses, and then rest easy knowing you’re renting to responsible people.

It’s only one right now. He’s an old friend who is living there for the cheap rent (which I’ve promised not to raise) and to spend more time with me. If I moved he would too, and even if he stayed and I increased rent, it wouldn’t be enough to cover what I need.

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