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Old 06-01-2017, 09:50 PM   #26
kekeeke
adept
 
Join Date: Apr 2011
Posts: 771
Re: First Time Selling a House

Quote:
Originally Posted by Cornboy View Post
I don't mean to hijack this - but I'm wondering if I could get some feedback / questions I should be asking myself about renting my house. I think this might be an OK place for it as CandyKreep is going through some similar things in terms of considering holding onto it to rent.

I'm looking to buy a house with my girlfriend. I don't need to sell my current home to do so. I also have a 1 bedroom condo I am currently renting out. The condo is very simple since I don't have to do anything other than occasional interior fixes. A house obviously is more complicated. I don't know how to price it or think about it.

House:
-3 bedroom, 1 bath in a very rural area of New Hampshire, but close to a major commuting route. Sits on 7+ acres, very nice and large yard, connected to snowmobile / hiking trails. Very long driveway (200 feet). It's secluded, which is why I like it so much.

-Mortgage is currently $107k. Appraises for $160k, I can expect somewhere in that neighborhood if I sell it. I've seen similar sites sell for $170k recently, I feel safer estimating a $155-160 sales point though.

-House is in a good school district.

-House has a pond, and a small stream running through the back. I mention that just because I'm not sure about the liabilities with it and tenants, particularly if there are kids.

-Mortgage Payment + Taxes + Insurance is $1050 a month right now. I expect that to drop by $50 a month in the coming year, they passed a new, lower budget (budget took a large one year bump for some school related expenses).

-The largest issue with a tenant would be yard care. I will be living an hour away, so can't take care of it myself. Ideally a tenant would do it, but that might scare them away - it's a 200 foot driveway and as mentioned the yard is very large. Mowing with a push mower, you're talking 3-4 hours, maybe a little more. 1 hour with a fast riding mower. I asked a company to come bid, and they told me $60 per mow, and $35 per plow in the winter.

-It's not really a financial move for me to rent it out. I love the property, and I'd love to live there again some day. It's not feasible to live there with my girlfriend, she has a good job that she likes, and this house would be too far for her (1.5 hour commute one way). So we're looking in areas that would be more convenient for us both. So I love the area, but should I really be thinking about where I'll be living in 25 years? It seems silly when I type it out.

I'm not sure how to price it for renting, given the yard. There are no huge upcoming known costs - the roof/heating/septic/windows are in good shape. The next thing might just be the water heater. Should I be thinking in terms of "I need to clear $X a year in order to pair for future repairs"?

Anyway, I might not be asking the right questions. If anyone has thoughts/advice/things I should think about I'd love to hear it. Renting the condo has been fine, but this seems more complicated.
It's just a math question.. calculate your current expenses + vacancy (you guys do around 10% of rent in general in the usa I think but you should be able to google it exactly) + interior maintenance + capex + exterior care. Cant give you specific numbers since id be talking out of my ass.

If you could only rent it 1500/m I dont think it would be worth it at a glance, imo you really need to cashflow 100+ per month to be worth it but if you want to live there later in life it could be worth it to breakeven, let your renter pay your mortgage and move there when ready. Beware that you really need to budget for everything. Renters are hard on stuff.

Capex = exterior maintenance like the cost of replacing the roof+all doors + all windows, ac unit etc etc. Average lifespan of most things is 25years but theres a few different stuff like here a water heater older then 10 years is not longer insured but it's average lifespan is easily 15+.
In my area vacancy = 5%, maintenance =500/y, capex for a house easily 80/m. I guess this can give you an idea but im in canada.

You can also check out rent to own as a selling point, tenants usually take care of all maintenance and housing care in rent to oen contracts.

Check out biggerpockets.com if you want better answer, im far from a real estate genius you need to do your own research for specifics.
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