A year ago a friend of mine had her home listed for $225,000. In 9 months on the market she received one offer at $200,000. She decided to turn down that offer and rent out her home instead, hoping the market would pick up and she could then sell her home for more then the $200,000 she could have gotten last year. She rented the home to a married 40's something couple who trashed the house, and left owing her 5 months rent by the time she could get them evicted. They did $20,000 in damage to the home in addition to stiffing her for $5000 in rent. The security deposit of $1000 didn't even begin to cover the money she's out. She now has the home on the market for $200,000 in hopes of selling quick and getting out from under the payment. She would have been further ahead if she would have just accepted the offer of $200,000 a year ago. If you rent out your property, the market may not recover in a year, it may be worse. You stand the risk of the renters trashing the home as my friend's renters did. Do you really want to be a landlord? Personally, I'd cut my losses, sell for enough to pay off the mortgage and then rent in your new location until you can build up another down payment.

I think that it boils down to your personal preference. I am a landlord, on my third set of tenants. I do pretty serious background and credit checks. I have learned a lot about what to and not to do. All of that said, we are happy with it. Our first tenants damamged our house, but aside from being a hassle, the security deposit covered it.

Funny, as I was typing this, my current tenants wrote to tell me about the garbage disposal not working. I have a home warranty company that I will send out to fix it.

One thing for us, we have pretty nice homes and we charge a lot of rent. So far we have only rented to military officers, so really we have had no trouble. I love my house in Hawaii. Since I can't work there right now, it is worth it to me to let the renters pay the mortgage so maybe I can move back!

I'm no expert but over the years it does appear to me that one way to accumulate wealth is investment real estate. Not exactly what you are doing but theoretically, if you "do it right" you should come out ahead.
But...dealing with people is really a pain and all the laws that deal with people is a lot too.
I think this decision depends on what your rental market is like and whether there are good property managers you can hire to watch out for the property and you still be able to make the mortgage.
It takes a certain type of person I think, but military people do it all the time so it can be done.

One more thing - if you go this route, there are websites where you can get the law, applications and source the credit and background checks. My step daughter was selling real estate for a while, her firm did property management, she advised never to use the property management firms as they could not and would not use their "gut" when interviewing and showing a rental. I thought it was good advise and have decided it is worth it to do the job myself.

When running your numbers on the rental income, always plan on the house being vacant one month per year. We have rented out the townhouse I bought when I was single for the past 9 years. We had one tenant in there for 5 years and it took a couple of months to get it rented the next time. The next tenant was there for less than two years and we had some damage as well as a bounced check from her. Again, it took a couple of months to get it rented, mostly because we needed to do significant painting etc. to get it ready. We are now on our third tenants. They are often late on their rent, but pay the penalties and are signing a lease for a second year. We chose to hang on to the townhouse because it is pretty much cash flow neutral and will be paid off in a few more years. It was a long-term thing w/ us as we want it to be supplementary income for us at that point. I would say that it is a moderate hassle and I wouldn't do it for a short term hoping for a better sale price. When experts talk about the market improving, that doesn't mean prices will rocket up. Most likely it means an end to the slide and a slow movement towards price appreciation.

I think you have to consider what kind of business you are in. Are you a real estate investor? (I am not.) Are you a property manager? (I am not.)

We are facing a similar decision and I told DH that we just aren't in that business! :-) So, I think we should sell. If it is a neutral cash flow, plus lots of hassle, why do I want a "new career"?

Another thing to consider is what the laws are like in your specific area. Apparently the laws in MA, where my townhouse is located, strongly favor the tenant, making things harder for the landlord. Check in to that as you ponder your game plan.

Can you sell your present home and rent in the new location?

I'd like to get away 'clean'; park my money; rent while waiting for the bottom (or the next job transfer).

We don't know how long this RE market will decline, but the shortest timeframe seems to be over a year. Could be 2010. I'd wait to see a sustained uptick in number of sales that continues for at least six months to believe we're 'all better now'.

Do you have time to be a landlord, espsecially if you move 2 hours away? Some tenants call about every little thing they percieve as wrong, some won't ever call you ... in my opinion that's worse ... you never know what the place will be like after they leave.

I was a landlord for 7 years, I don't want to ever be one again. And being 2 hours away would be a pain.

I just want to put my 2 cents in that I've had good experiences renting as well, and we were across the country every time. Our MD townhouse, which was a huge stretch for us to purchase as we were moving out and renting on the west coast, and then sat empty for 6 months, has had the same wonderful tenant for over 12 years, a gov't engineer.
We rented out the CA house from MD (sold that one) and another MD house from CA (just sold that one), both to military officers, one a colleague (mistake and I knew it going in, but worked out fine, and then sold it to them) and one through militarybyowner.com.

Really, we've had very few issues, smart tenants with known income, 1 year minimum leases but usually lasted a tour length. I forgot, we had another CA mountain house that we rented to civilians, also managed long distance, no problems, sold.

We've made $$$ selling all of them, reinvesting into the next house (or sailboat, which has remarkably held its value), even though we certainly didn't sell at the top or bottom of the market. Good luck and timing.

One thing - around here in FL, it seems like most of the buyers want the "steal", not the "deal". The sellers are all groaning because someone desperate goes for the "steal" offer and the comps drop for everyone else. Sailboat-depth waterfront can be had for under $500K right now!

If you think there is a decent chance that you'll want to move back to your current area within the next 3 years - rent out your home. And you can rent a house in your new location.

If you think your done with your current location, sell your house. Rent in your new location until you can afford to buy.

You should call your accountant and have him/her run the numbers for the different options. If you rent, you will be able to take deductions for renting the property and depending on your tax situation, this could be beneficial. I didn't consult an accountant and should have.

If you keep the property and rent it, then when you sell, you will have to pay capital gains since it will not be a sale of your primary residence. When I sold my rental property and had to pay the capital gains on the sale, and to say I was not pleased is an understatement (although Uncle Sam was happy).

I owned a condo I rented for years. I used a management company (I moved across the country) and used them again for a second time when I married and bought a place with my DH (I was only 1/2 an hour from the condo). Hindsight being what it is, on one hand I wish I had sold the condo when we moved to our new place and avoided the capital gains I paid, but I also would not have gotten as much for the condo, so who knows which would have been better......

I liked the management company option - they found the renter, dealt with all the collecting of the rent (and the tenant when the rent check was late) and I didn't have to go and snake a toilet in the middle of the night (major perk).

Good luck and congrats on the new job.