Newspaper article The Topeka Capital-Journal

Do the Math to Determine Whether to Rent or Sell

Newspaper article The Topeka Capital-Journal

Do the Math to Determine Whether to Rent or Sell

Article excerpt

Dear Bruce: I have a home that is paid in full. I want to purchase another home for $75,000. The mortgage won't be much money, and I can afford it with no problem.

Do you think it's wise to rent out the first home or sell it? It's worth around $60,000. If so, what should I be looking for in tenants? -- Reader

Dear Reader: Your question is generally just a matter of numbers. You say the house is worth $60,000. If you were to sell it, investing the $60,000 might bring you conservatively $3,000 to $5,000 annually, and there will be some fees.

On the other hand, you didn't tell me what the neighborhood is like. But if you can rent the house for $800 to $900 a month (even with expenses), you would be ahead of the game by renting rather than selling. Of course, if you are going to rent, you should be aware of all the challenges that are involved in being a landlord. …

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