I just went back and checked my college town where rentals were always well, well above 1% and they're still there. The rule used to be 2%. Inflation hasn't been high in 50 years (I do remember my 13.8% 5 year adjustable mortgage) where inflation was double what it's ever been in this century. I certainly agree that there are areas where you can't get that much. In those areas, SELL.JackThe simple 1% rule says sell. $2.8M value means a MINIMUM of $28,000 a month rent. You're talking 1/3rd that. Then say you come back in 2 years to find that the renters opened their house up to their family and friends for never ending parties and it needs a tremendous amount of work.
Absolutely sell.
I know you quote the "1% rule" ie 1% of home value per month.
I would reckon there's very few places in America that would work
1% is a fast, easy way to go. If you want to spread sheet this, certainly do that. I know from our FIL's house who passed, carrying costs are about 33% of value with no mortgage. Figure 50% or more with a mortgage. Rentals will cost more. Ask your mortgage company what your upcoming house will do when it's rented and the company will give you a new rate, much higher than what you now have. When we rented our house during my trip out for grad school, insurance doubled. Our management company cost 10% of the rent. Things are going to need maintenance and repair (zero of this figured on my FIL's house) and if you're out of the country, you're not going to pop in to fix a simple thing. You'll pay a contractor through the manager and it's not going to be cheap. With our own house that we rented (for 1%), when we returned, values had dropped 20% so we lost a good chunk we could have had if we sold instead of renting out. We also had to completely redo a hard wood floor that renters "didn't know" that chairs with metal feet would scratch the finish completely off over time. And of course, renters "fly the coop" which ours did, with no notice, no forwarding address, and of course, no money.
Statistics: Posted by Jack FFR1846 — Tue Nov 19, 2024 6:53 am — Replies 22 — Views 1634