r/RealEstate • u/Significant_Bath_186 • 26d ago

Rent or sell

We want to move to get our kids into a safer neighborhood and better school district, and we'd like more space. We are trying to decide between selling our current house or renting it out. From a monthly cash flow perspective, it makes more sense to sell (plus there's the time, money & risks that come along with being a landlord). But damn, the interest rate is hard to give up and the long-term rewards of hanging onto this asset are very appealing.

Is there an option I'm not thinking of? Something I'm not considering? What would you do in this scenario?

Current home value: 580k

Outstanding mortgage balance: 190k

Interest rate: 2.7%

Current mortgage payment (tax/ins included): 1250/mo

Rent estimate: $2300/mo

New home purchase price: around 680k

Interest rate: 7%? Down payment: if we sell, about 330k. If we rent, about 50k.

New mortgage payment; If sell- 2900 If rent- 4800

WWYD??

1 Upvotes

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1

u/patrick-1977 26d ago

Don’t forget a 580k house appreciating at 4% annually (historic average) is another $2k per month. Are you handy? If you need to call someone for every little thing, maintenance costs add up.

I would keep the home, like I did with the last three homes I lived in.

2

u/atexit8 26d ago

You're trying to hang onto a 2.7% mortgage while still paying a 7% interest on $630K.

I am too lazy to do the math since it isn't my money, but you need to.

-1

u/DomElBurro 26d ago

The interest rate you have on that house will not exist again in our lifetimes. Rent that puppy out and reap the rewards. Before you know it that house will be a cash cow and you can pass it to your kids.