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Considerations for renting out my house vice selling and investing the gains

Hi everyone,

I'm facing a bit of a dilemma and could use some advice. I'm taking a job overseas for at least 3 years and need to decide what to do with my current home.

Here's the breakdown:

  • House: Single-family home built in 1994, owned for 8 years
  • Mortgage: $375k at 2.25% (VA loan)
  • Market Value: ~$700k
  • Rental Income Potential: ~$3200/month for much smaller nearby townhouses
  • Renovation Costs: ~$100k to prepare for sale/rental

Options:

  1. Rent Out:
    • Potential income but ongoing maintenance and property management costs
    • Risk of vacancies and tenant issues
    • Long-term appreciation potential
  2. Sell and Invest:
    • Lump sum of cash to invest in low-cost index funds (Fidelity ZERO International Index, Fidelity ZERO Total Market Index)
    • Potential for higher returns than real estate, but market volatility
    • Loss of potential long-term appreciation from the house

Questions:

  • Is it worth the investment to renovate my house for rental or sale?
  • What are the potential tax implications of each option?
  • Are there any other factors I should consider?
  • Are there any calculators that already exist that could help?
submitted by /u/HoodFeelGood
[link] [comments]

source https://www.reddit.com/r/RealEstate/comments/1gkudfn/considerations_for_renting_out_my_house_vice/
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