I'm getting a lake house and trying to decide if we should lease out our house and keep it as an asset - or sell it and take the money and run.
Not sure if you need more info.

Current house, I'm assuming?

We just went through this. Only holding one house with a mortgage we just couldn't charge rent enough to break even. Our only motivation for holding it would be equity growth in the future. We had already gained $100k of equity in the property. The likelihood that it got another $100k in any decent amount of time was low...

If we had more of our first mortgage paid down or lower property taxes, we might have considered it.

If you sell it the big question is what do you do with the money?

How much would you get by selling?
How much would you get by leasing?
What would you do with the money if you sold?

What market?

The property we are leaving is out by RELLIS which is increasing in value quickly but also just annexed and taxes are also increasing.
It will probably sell for 300-350 netting us about 1/2 which we'd pay down a large part of the new property and make some improvements.
Leasing wouldn't make us much money in terms of monthly profit over mortgage but primarily increasing equity in a property that is becoming more valuable. It's doubled in value in the last 10 years and as they add more facilities and private business begins to expand on campus, I expect the trend to continue.

I think I'm leaning toward selling just to keep things simple, but I just was looking for different angles.

As this post will demonstrate I'm not a real estate expert but I did take classes at TAMU. Your situation is all about opportunity cost and cash flow. It's complicated and frankly, there aren't enough details to conduct a proper analysis.

TVM

Just general questions to help you think through this.

Do you think you can rent at $1/sqft a month?

If you didn't have the house in college station, and were looking at buying a rental in college station, would you choose your house?

Are you willing to lease it for just mortgage+taxes+insurance? How much cash flow on top of the MTI would you need to consider keeping it? Consider future repairs and potential management costs as well.

The most powerful part of rental property is leverage from only having to put 20% down. If you've got a 180k in equity in the house and profiting $100 in cash, and $700 in equity each month, is that enough return for you to consider keeping it?

If you pulled the 180k in equity out, how much would that accelerate you paying off your lake house mortgage? What about in your stock market portfolio?
That 180k could be 5 down payments on five rentals. If you're interested in being a landlord and cash flow, how far are you wanting to go?

Hope this helps.

Is this acreage? I live out that way and have some friends wanting to be in West Bryan.

Thanks, that helps. I think we'll sell. I would like to get into the rental biz, but there is too much going on in the other businesses to add a distraction that isn't going to have a better ROI.

katlong said:

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Is this acreage? I live out that way and have some friends wanting to be in West Bryan.

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There is 2 acres with it. About 3/4ac privacy fenced in back yard. DM me for more details.

Some people have the temperment for owning rental property. I do not. If you have never had a rent house before, think about how much you will be bothered by midnight calls about the hot water heater going out. If you will use a property management company, then the midnight calls go away. But that also cuts into the monthly income you receive.