In a place with high population density, there will be strong market forces normalizing rental rates and sale prices and equalizing them to a similar growth that an investor could get in the stock market with a similar investment. If you have already paid off much of the house this is actually a reason NOT to rent it out. In general, in order to beat the stock market (or just keep up with it) with rental property you must be pretty highly leveraged (say that you still own less than half of the house with equity or so). (Some stuff like youtubeing had crazy maximums, but the averages we're low).Ģ. Of all the "side-hustles" studied in a recent report I read, real estate property management had the highest average hourly wage. There are a hundred ways to do the math and it is easy to convince yourself one way or the other.īig unknowns are the maintenance costs of the property (both $$ and hours you might spend fixing stuff) and number of months between renters. This will vary wildly between people and places. When we pick, say, 20 years out, how does this pencil out, so we can compare it to other investments? Real estate feels generally solid in the long run, but even farming out the management we have the worry of getting a bad tenant and winding up with damage or legal wrangling. Which sort of brings me back to the search for a calculator.
#LIVING EXPENSES CALCULATOR FORUMS FULL#
It's really a question of the total wins/losses over the full term. If we paid it off instead of investing elsewhere, the cost of running the house would remain the same, and the rent would remain the same. Which exposes that whole question of whether it's relevant that the house won't cover its own costs. We thought we were being thoroughly conservative by saying to ourselves "We don't expect to make any money on rent, just for the house to take care of its own expenses." It turns out it's reasonably likely to fail to do so.Ĭertainly, it'll be paid off in the middling future, at which point it'll pay for its own maintenance and then some. However, we had it so filed as a "no brainer" that we only just did a little cocktail napkin math and realized that between mortgage, taxes, and property management fees, we probably wouldn't be collecting enough on the projected rent to stay much ahead of maintenance costs, if at all.
It may fall from it's current value with a "market correction," but it would seem set to become more valuable over the long haul. It's in inner SE Portland, and thus an area that's likely to see only increasing demand over the coming years, regardless of the general ebb and flow of the market. We've just moved, and were working under the assumption that if we can, that we should keep the old house and rent it out. Before wading in, I'll throw out a request for anybody with a good calculator or spreadsheet (it's easy to find some, harder to find some I have faith in) for answering the "sell or keep and rent?" question for a house you're no longer living in.
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