Reply to Rent current house or sell and invest?

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[quote=Anonymous][quote=Anonymous]Similar, 2.5% mortgage on our old house and we decided to keep and rent it out although we just bought a new house.

Pros:
- the house itself is an ok SFH for rental because it is small, walkable to a lot of amenities and to metro, small yard to maintain but also enough bedrooms for young family and good schools. So it can work for multiple demographics (young couples, young or small families, older people) 
- DH really wanted to keep our $$ in real estate instead of adding investments in stock market. We know that house and it’s maintenance costs so it is easier than buying other investment properties (but for sure not as good an investment as apartments would be) 
- we are planning on keeping the house for a very long time, hopefully even passing it on to our kids

Cons:
- I don’t think we would  have done it with a house that needed a lot of investments. You need to calculate your return rate based on the rent you plan on charging. Our current house PITI is 2500 we are renting it at 3500 (based on comp we thought rent for that house could be anywhere between 3250 and 3800). We are not planning to make a profit on it, just be able to maintain the house for the coming 5/8 years with average 12k positive cash-flow. Then with rent increase maybe it will start to provide some cash-flow
- we would not have done it if we didn’t plan to keep it for long term because then you lose the tax benefits linked to selling your primary home (you need to have lived in your home 2 out of the last 5 years to be exempt of taxes on profit -up to a certain amount that I forget now). That to me was a key factor. 
- we will be living nearby which will save us money on property management. Planning to do it ourselves

All in all it wasn’t a clear cut smart choice. It made sense for us based on specific house, being able to get 1k a month to reinvest in house and the fact that we wanted to keep more real estate and are ready to hold it forever

[/quote]

OP. Thanks so much for this thoughtful response. 
Characteristics of the house are similar. 
However, the difference between our PITI (2300) and potential rent ( ? 2800) is much smaller and I think that's the most significant point.
In theory, keeping and renting out sounds great, but then I think about the "issues" associated with an older house and it sounds like a headache. [/quote]

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