Thread: Everyone tells me I'm crazy to sell!

Hello everyone,

I own (not sure how to change renter up there) a lovely little brick 1925 bungalow (2bd, 1ba, mature yard on river). I recently got engaged and the plan has always been to move into my fiance's house (newer, nicer, bigger). We think it's the best financial move to sell my house.

Here are some stats:

Current PITI: $900/month or 37% of my gross income
Typical rent expected: $700-800/month (according to property managers)
Currently listed at: $149,900
Current mortgage: $119,000
Average DOM for area: 133

Owned the house since 2004 but had to refi in 2008 to buy out an ex, so payments went up about $200 from what they were.

The market in my little town is somewhat stagnant. Homes under $160k are said to sell quicker than homes over $250k here. That's probably everywhere though.

I have had a few friends approach me and said, "I know someone who will rent it for $1000/mo!" OK, so even if they did, they'd soon realize they are getting screwed and find somewhere cheaper! Heck it'd be cheaper to buy the house at that price!

I cannot assume I'll always get that much. Is it really worth holding on to this house if I get $800/month? What if I can get the mortgage paid for? What if I'm able to get $1000? I could refi to get a lower rate (5.375% to 4.6? or lower?) which can lower my payments.

How do I figure if it's worth keeping? These people have me second guessing myself.

Many people say if I can get the mortgage paid for, then it would be stupid to sell. It doesn't matter what the home value is now, only when you go to sell. Yes, but I think they don't realize that it will be work to be a landlady. I would still need to continue to maintain the yard and do all repairs, while maintaining our current residence. Then there's occupancy rate and all that stuff. The yard has many xeriscaped gardens and has an irrigation share, so we're looking at at least 5 hours per week to keep just the yard looking nice in the spring/summer/fall. Paying someone to do it is pointless if I'm not making money or little money.

Now if I sell, with the estimated profit I would make I could pay off all of my student loans (went back to school for a Master's). As in 100% debt free. No second home to care for, more free time, more of my money I can put into retirement.

The lot is in on the river and supposedly these do not come up on the market very often, so they are hot commodity. However that hasn't be proven with offers just yet!

How do you decide if it's worth keeping? I just don't see it being an investment vehicle unless we're talking keep it for the next 10 years. Then I have an 93 year old house.

Edited to add: If I were not engaged, then I would still be living in my house mainly alone. I take on the occasional, short term renter as favors to friends in transition.