Since I find myself unexpectedly in the position of a potential landlord of a townhouse due to an inheritance, I'm going to jump in with some questions being it seems like there are some knowledgeable folks already here...
First, I found this calculator online - does it appear to at least somewhat accurately depict reality?
http://www.goodmortgage.com/calc_investment_property.htm
Summary is:
Approximate Value: $205k (similar unit sold for this over the summer)
Owed: $110K
Taxes: ~$3k/yr
Insurance: ~$500/yr
HOA: $100/mo (going up to some as-yet unspecified amount in Jan)
I'd hope to get something in the $1350/mo rental, another unit rented for $1250 over the summer, but was not as nice. I do plan on using an agent to find a renter, which is 1 month's rent out the door, but I just don't have the time right now.
With a 30 year note @ 6.0% (is that really out of the question these days?), taking into account taxes and depreciation (which actually has be claiming a loss), the calculator claims I'll pocket about $3500/yr, assuming a modest property value growth (it is down a bit in the area, which is why I want to hold on to it, but we haven't been hit that bad), it puts me at +$9500 to my net worth.
For all practical purposes, I think I'll need to set aside the positive cashflow for unexpected repairs (although nearly everything is nearly new - new kitchen appliances, new heating system, new, expensive carpeting and hardwood, new deck, roof replaced ~5 yrs ago). On the flip side, all the new cosmetic repairs make me a bit leery about renters coming in and trashing them.
On the other hand, I could sell and after commissions and taxes, walk away with around $85k. Of course, it might sit on the market for 6 months for sale, where I'd probably get a renter in much sooner... I've no doubt that holding onto it is the better long term investment, but I'd also like to use the opportunity to purchase a new home and take advantage of the relatively cheap market for that... Getting what I want in the area of want, without some of the cash influx from the sale of the property would have me be on the edge of my comfort zone, in the case where something
really goes wrong with the rental...
So, what say the hive mind? No brainer to keep the property and rent it?