What area are you moving to, OP? How far is it?

Anonymous wrote:If there's a 50-50 chance you may be returning to the DMV, I'd rent.

You have a nice house in a nice neighborhood and a great low interest rate mortgage. You can rent for a couple years until your plans become more firm.

If it turned out you aren't returning to the DMV, then I'd probably sell. But with a 50-50 chance I'd rent for now.

This is sound advice, OP. You have 3 years to sell and take advantage of the tax exemption on the gains.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We are moving out of the DC area and are weighing sell vs. rent options. Facts:

- It’s a SFH in a desirable neighborhood with good schools.
- We pay 2.7% interest on the mortgage.
- Equity is $650K, give or take $100K.
- We don’t know if we’ll return to the DC area or not. Right now odds are 50-50.

WWYD? Will we be able to find good tenants given the economic situation? Rent for 1-2 years then decide? Or take the money and run now? I’m very hesitant to give up the low interest rate. Rent less expenses would in theory cover the mortgage and yield a small profit, but there are many unknowns.

I am south asian and this is the advice we got- you only need enough rent that it covers your interest payment, that is enough money to justify keeping the property. Think of paying the principle as an investments/savings vehicle. I would add maintenance fees to this but the people I know who follow this advice are refugees the I got here with 20 bucks in my pocket/one suitcase crowd and they are all millionaires now.

I know ppl love to leverage debt for real estate but I must say that the fully paid off commercial property I have that brings in a very tidy sum brings me incredible peace of mind for my old age.

But you can also invest that "sold commercial property value" and bring in a "very tidy sum" and not be tied to managing a property. For SFH it typically doesn't earn you that much. Not worth the huge hassle IMO

This is what I discovered when I did the math on keeping my house. I did not want to manage the property, and the property managers would likely end up with any "profit."

The margins were small even for a home without a mortgage.

Exactly! Add in having a few months without renters (lease up and it takes a few to find new retners) and possbily having extra repairs due to renter damages, it's hard to break even. Much less stress to put money in stock market

If there's a 50-50 chance you may be returning to the DMV, I'd rent.

You have a nice house in a nice neighborhood and a great low interest rate mortgage. You can rent for a couple years until your plans become more firm.

If it turned out you aren't returning to the DMV, then I'd probably sell. But with a 50-50 chance I'd rent for now.

Anonymous wrote:

Anonymous wrote:DC or “DC area”? Being a landlord in DC is a pain. VA or MD would be easier.

This is crucial. I’d never be a landlord in DC itself.

As a current landlord in DC, totally agree. Tenants have more rights than you do. Don't do it. Or if you do, only do short-term rentals to families who are renovating.

Talk with your accountant and find out what tax benefits you can get from renting and then decide if it’s worth waiting a year or 2 in the hope the market is better. Yes renting is a PIA but interest rates and gov layoffs have cooled the housing market.

Depends on your neighborhood. Ours just won't go down, it won't. We will get our investment back holding on to it. You need to play out all scenarios and analyze pros and cons. Every situation is different. You can't tell me that it's always worked out for those who sold or rented - it's just dependent on both your future plans of ever needing the house again and balancing that against financials. You never know what the future holds as the best laid plans and all.. so take some time and really go through thinking about every scenario.

Anonymous wrote:

Anonymous wrote:We are moving out of the DC area and are weighing sell vs. rent options. Facts:

- It’s a SFH in a desirable neighborhood with good schools.
- We pay 2.7% interest on the mortgage.
- Equity is $650K, give or take $100K.
- We don’t know if we’ll return to the DC area or not. Right now odds are 50-50.

WWYD? Will we be able to find good tenants given the economic situation? Rent for 1-2 years then decide? Or take the money and run now? I’m very hesitant to give up the low interest rate. Rent less expenses would in theory cover the mortgage and yield a small profit, but there are many unknowns.

Do you live in Maryland? If yes, you'd have to rent for a minimum of two years. You also need to install fire alarm/carbon dioxide detectors on each floor and allow people to have pets if they say they need them for medical reasons. Same goes for any handrails one might need in the bathroom.

I had a second home and decided to sell it, but that may not be the right decision for you. I interviewed two property management companies during my decision-making process and learned a lot about what would need to be done.

The other item you have to pay for is lead testing. In Maryland, you must pay for lead testing EVERY time before someone moves into the house. It does not matter if you paid for lead testing and it came up negative five times, you must still have lead testing.

There's also a law that you have to have heat all the time. Poorly written law because, of course, you have to have time to correct the problem. But you will have to handle heating or AC breaking down from wherever you are.

Anonymous wrote:
I am south asian and this is the advice we got- you only need enough rent that it covers your interest payment, that is enough money to justify keeping the property. Think of paying the principle as an investments/savings vehicle. I would add maintenance fees to this but the people I know who follow this advice are refugees the I got here with 20 bucks in my pocket/one suitcase crowd and they are all millionaires now.

I know ppl love to leverage debt for real estate but I must say that the fully paid off commercial property I have that brings in a very tidy sum brings me incredible peace of mind for my old age.

Oh please, everyone who immigrated and could boil rice and beans for food are millionaires now. Only Americans who have lived here their entire life, did not go to community college, came from broken families, and don't know how to cook from scratch - have remained poor.

The exact economic circumstances that these people lived through is not replicable. You have to live very frugally and be single minded about saving money, creating alternate streams of income and putting in the kind of immigrant work that most people cannot - that you use real estate as a means to get rich.

Where are you moving? Do you have family in the DC area?

If no family here and you’re moving to a large metro like Los Angeles, NYC etc there is little chance you’ll want to move back. There are also other job opportunities to keep you there. If you’re moving to a one industry town then I’d lean more towards keeping the house.

Personally I wouldn’t want to move with the assumption I might return. It is better to move on and plant roots.

As a South Asian (not the same one who posted before), I would never spend money in real estate that I am not living in personally. Yes, I am all for buying huge homes if your children, parents, ILs will live with you. But to have a rental property that you cannot give attention to, is a waste of resources.

BUT - several things that OP is considering -
- OP is not sure that they will be back.
- OP has a good interest rate.
- OP has missed the best time to sell.
- This is a bad market for sellers right now because of economic upheaval.

So, I would vote for not selling in the short term, unless you get a good return on your property.

I agree with everyone, normally I would say sell it. Everyone I know who has held on has ended up selling eventually because it’s too much of a pain dealing with from afar. The only hold out is the coming back. Only you know how disappointing it would be to come back and not be able to move back in. Or how likely that scenario is so I would work through that.

Anonymous wrote:

Anonymous wrote:We are moving out of the DC area and are weighing sell vs. rent options. Facts:

- It’s a SFH in a desirable neighborhood with good schools.
- We pay 2.7% interest on the mortgage.
- Equity is $650K, give or take $100K.
- We don’t know if we’ll return to the DC area or not. Right now odds are 50-50.

WWYD? Will we be able to find good tenants given the economic situation? Rent for 1-2 years then decide? Or take the money and run now? I’m very hesitant to give up the low interest rate. Rent less expenses would in theory cover the mortgage and yield a small profit, but there are many unknowns.

I am south asian and this is the advice we got- you only need enough rent that it covers your interest payment, that is enough money to justify keeping the property. Think of paying the principle as an investments/savings vehicle. I would add maintenance fees to this but the people I know who follow this advice are refugees the I got here with 20 bucks in my pocket/one suitcase crowd and they are all millionaires now.

I know ppl love to leverage debt for real estate but I must say that the fully paid off commercial property I have that brings in a very tidy sum brings me incredible peace of mind for my old age.

+1

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We are moving out of the DC area and are weighing sell vs. rent options. Facts:

- It’s a SFH in a desirable neighborhood with good schools.
- We pay 2.7% interest on the mortgage.
- Equity is $650K, give or take $100K.
- We don’t know if we’ll return to the DC area or not. Right now odds are 50-50.

WWYD? Will we be able to find good tenants given the economic situation? Rent for 1-2 years then decide? Or take the money and run now? I’m very hesitant to give up the low interest rate. Rent less expenses would in theory cover the mortgage and yield a small profit, but there are many unknowns.

I am south asian and this is the advice we got- you only need enough rent that it covers your interest payment, that is enough money to justify keeping the property. Think of paying the principle as an investments/savings vehicle. I would add maintenance fees to this but the people I know who follow this advice are refugees the I got here with 20 bucks in my pocket/one suitcase crowd and they are all millionaires now.

I know ppl love to leverage debt for real estate but I must say that the fully paid off commercial property I have that brings in a very tidy sum brings me incredible peace of mind for my old age.

But you can also invest that "sold commercial property value" and bring in a "very tidy sum" and not be tied to managing a property. For SFH it typically doesn't earn you that much. Not worth the huge hassle IMO

This is what I discovered when I did the math on keeping my house. I did not want to manage the property, and the property managers would likely end up with any "profit."

The margins were small even for a home without a mortgage.

I don’t think the issue for op is potential profit. It’s about how likely they are to return to this area, and will they want that house available to them when they do.

Anonymous wrote:

Anonymous wrote:We are moving out of the DC area and are weighing sell vs. rent options. Facts:

- It’s a SFH in a desirable neighborhood with good schools.
- We pay 2.7% interest on the mortgage.
- Equity is $650K, give or take $100K.
- We don’t know if we’ll return to the DC area or not. Right now odds are 50-50.

WWYD? Will we be able to find good tenants given the economic situation? Rent for 1-2 years then decide? Or take the money and run now? I’m very hesitant to give up the low interest rate. Rent less expenses would in theory cover the mortgage and yield a small profit, but there are many unknowns.

Never sell unless the offer is too good to pass up, like 10 times the value, etc.

Why?