Is it Time to Sell?

In America the rout to home ownership can take many forms, but a typical path is to buy a starter home then as you increase your income and family size, sell the starter home and buy a larger more permanent home. This was the path I found myself on and over the last year my wife and I worked on selling the starter home with no success. Since I couldn't sell the home for the price point I wanted, renting became the next best option.

It took about 2-3 months to find the right renter. Tons of people looked at it, some good some not. It came down to price point for most. I asked market value but for the market I live in it is on the higher end of cost for most renters. Luckily, I found the perfect renter. I am ecstatic to have the renter we have. The rent will pay down the mortgage for the next 3-5 years, depending on how long the renter decides to rent the house. We will profit a small amount each month which is a great plus.

I talk about this to pose the question, is it better to sell or rent your starter home? Obviously location is a huge factor in deciding what is best. Larger cities in the United States tend to have greater appreciation and higher demand for real estate, which can make selling a home more appealing. In West Virginia, appreciation is subtle and real estate values tend to appreciate slowly. This tends to be the case for most properties in the mid-west and non coastal areas. The looming thought point for me - should I rent out my started home for a few years to allow the equity portion of the loan to be paid down while profiting every month? Is that option better than getting a lump sum and paying a realtor 6% commission? In my opinion it comes down to risk tolerance and the willingness to deal with the logistics and time constraints needed to rent a single family home verse selling one. Either option can work well and benefit the seller.