We moved out of our primary residence 1 year ago, and decided to rent it rather than sell in a down market. The current rent more than covers mortgage, and will pay the house off completely in 5 years. It has been very easy to find good tenants. It seems like a no brainer to keep on renting it out (we don't need the equity for another purchase), but there is some disagreement between my wife and I about which way to go. Any input?

I would say that if you can comfortably make the mortgage payments without having any tenants, have a 6-8 month emergency fund for your family in case you lose your job or something, have a separate emergency fund for the property in case of repairs or unexpected expenses, and can deal with the hassle of renting issues, then keep it. If you don't have money saved for repairs, can not make the payments without tenants, find it stressful, or need the money for other obligations, you might consider sellin*** I would weigh the pros/cons and see which one fits your needs. It would be nice to have the property paid for it 5 years. By then, if not sooner, the market will be better and you could break even, potentially make a large profit or continue to rent it out for additional income. Then again, emotions play a part too. If your wife is uncomfortable with the idea, it could put some strain on your relationship, and nothing is worth that.

Good luck

Thanks for response. A bit more info. We owe $52,000 on the house at 5.5% interest. The payoff is actually in 8 years, not 5. Payoff coincides with my turning 62, a likely retirement date. Currently our monthly payment is $920, of which $525 goes to principle. We rent the house for $1000/month, a little below market for a 4BR house in our area. By doing so, we have been able to screen carefully, and get really good tenants. My phone starts ringing within minutes opf posting the listing on Craigs List. The market value of the house has dropped in the current market, but is still well above what we paid for it (paid $118,000 in 2000). The house would probably sell quickly for arround $180,000 to $190,000. There are no major repairs needed or forecasted for several years (house has relatively new roof, new paint, new windows, new floor coverings. We have another house to live in that in paid for. To me, this looks like a good long term rental and investment. Not sure what I would do right now if I had the $130,000 equity available to invest elsewhere. I won two other houses outright that I bought 15 to 20 years ago when things were really cheap here. Seems like a good source of stored wealth and future retirement earnings. Ther is the rest of the picture. What else should I be thinking of. Thanks

Sounds like you have a decent handle on things. Renting out property that you own, especially outright, can be a good source of income. There are a lot of work that goes into it as well. If you can handle all the financial aspects of it and are willing to do all the work as well then sounds like a good plan. In retirement, especially as you get older, you might find it more difficult or decide that you no longer want to deal with the hassle of renting properties. There are also 3rd party companies that will handle all aspects of renting the property for you, including making repairs (which could be nice, especially those middle of the night emergencies), handle advertising, legal issues, ect. All you do is collect the difference between what the tenant minus the 3rd party fees. That might be an idea later if you decide it's to much work or don't want to deal with it. Then again, you could do a lot of investing outside of RE with that much equity. If I read correctly, you have a total of 3 houses? Selling one may not be bad. One less debt to have going into retirement. Or, if you are already well off, early retirement, or even waiting to retire and being able to enjoy retirement more could be nice. You might want to see an accountant and a fee based financial planner that could help you in more detail plan. Also, if you haven't done so already be sure to have a detailed will on exactly what goes to who or your wealth may go to the government. Hope that helps.

I am currently doing the same deal with our property. So far it has worked out great. The key to making it work is finding quality renters. Also keep in mind that not Home insurance programs are going to cover the liability of renters. Before offering your place for rent make sure you check with your state landlord tennant laws to prepare for the worse.

There's no point in selling until you really have to, and that doesn't sound like it will be quite some time, so i wouldn't worry about it.

If you're making the mortgage payment then I am not sure what the problem would be. What does your wife use as evidence that this is a bad decision? I guess you are unable to rite off your mortgage now (assuming you are renting another place and did not buy one). I know my fiance and I decided NOT to rent out our place and rent another because we would lose the homestead exemption...but if you're not worried about any of those things...what's the problem?

I missed this when I made the last response...seems like you have a great handle on things. I'd keep doing what you're doing and only sell if necessary.

Yeah, keeps things steady. If you try to sell, you are certainly going to run into some problems. Also, you have good tenants that pay rent on time. What else can an investor desire?

Wait five more years till it's paid off. It will make more sense to you when you own it outright.