Sell condo or rent it out?

My wife and I are under contract on a single family home and are unsure of whether to keep the condo we still live in or sell it. We have two kids and have outgrown it, so that is why we are moving up. We have differing opinions on what to do with it. If we keep condo and rent it out, at best we will have only $200 positive monthly cash flow (but quite possibly only $100), which is why it makes no sense to me to keep it. One costly repair is all it takes to mess up the plan. I know there are tax savings, depreciation, etc. but I believe you really need to rent it for several years in order for depreciation to be a that correct? During that time, there will be needed remodeling to pay for since it hasn't been updated in about 12 years, which of course adds more cost. To me, it sounds like a possible money pit. Having little monthly cash flow while waiting for a property to increase in value doesn't sound like a good plan to me and it sounds dangerous. Even though we can afford it, it seems like a waste of money. I overpaid for the condo 10 years ago for 248k and it's now worth about 180k (we owe 137k), so I understand why my wife wants to try to make some more money back by keeping it and renting it out, but it sounds like a losing battle to me and still just doesn't make sense in my opinion. I greatly appreciate any feedback from Mark or any members with this experience. Thank you!


  • The big question is what can you do with the money if you sell? Can you buy something else that makes way more money?
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  • Yes, I agree with Mark, if you want to buy any other thing that helps you in making more money, then sell it. If not the give it for rent.
  • I started my rental business by converting my condo to a rental. I was in a similar situation but I was actually losing money and I couldn't sell it. I spent the next 4 years trying to save costs, raise rents and fighting the condo board. I wouldn't recommend keeping it as a rental. It's too risky to leave the fate of your asset up to a condo board. For example, they can start charging you an annual fee for the privilege of renting your unit anytime they want. Mine did. If you are only going to make $100 - $200 per month in cash flow, I would look for something better. I think you can do much better with your $40k in equity.
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