Renting vs Selling a House with Young Kids

We listed our house on March 1 and it sold in 3 weeks. I have a 2 and 3 year old. Here are some tips on what we did to keep it show place condition:
We massively decluttered our home. We either donated items to Goodwill or threw it away.
I hired a cleaning service to deep clean prior to listing our home. It was well worth the money in my opinion because I could keep up with the day to day vacuuming and dusting. It just gave our house a luxurious feel like being in a 5 star hotel.
When I cleaned I put gates up, so if we were downstairs cleaning then my kids were confined to only a couple rooms at a time. I cleaned their areas last.
I put out fresh flowers, silk arrangements ( bought inexpensive arrangements at Garden Ridge or Hobby Lobby and bouquets at Walmart) to give the place pops of color and coziness.
We planted a St. Joseph statue in the backyard. You can get them at any Christian store.
Omaha was never hit as bad as other parts of the country when it comes to the economic downturn and housing crash, but it did slow down for a year or so. It seems the market is coming back. We did realize that we were going to take a hit on profit from our house, but made up for it when we purchased our new home.
Our loan officer told us that people that try to rent a home and purchase a new home will not get a loan. She said those days are gone. Banks are too scared to take that risk right now. Even if people have excellent credit or cash on hand. I would try to sell. You might be surprised how quickly it sells! Good luck!
P.S. I forgot to add we had a really great real estate agent that aggressively marketed/advertised our house. She had our house in every print ad available: newspaper, website, home show on tv, and magazines although I don't think we actually made it into a magazine because our house sold so quickly! She also did open houses, but had to cancel the second one because our house sold the day before!
A.

I have not sold a house since my son was around but sold ours quickly with some nice marketing literature provided with ALL updates, maintenance etc. listed and easy to see.
I have owned a rental house and, generally speaking, it was a nightmare. People can be pigs. When I rented places, I always left with them better than when I moved in, but I must be the exception. Our rental house was disgusting every time someone moved out. And it was in a decent area too. Figure in the taxes, maintenance, mortgage (if you have O.--we didn't--and we still barely broke even) to see than the P/L realistically looks like.

Personally, I'd sell.

We kept our first house as a rental property. Being a landlord is definitely not for everyone. If you and your hubby can do it yourself, a small profit can be made. We drew up the paperwork on our own. We advertise with just a sign. We do almost all the repairs that come up ourselves (and we have a good a/c and an electric company on stand by if we need it). If you get a company to handle this for you, you will be lucky to break even on the deal. People can be destructive and slobs. Since it was our original home, I was heartbroken to see it after the first tenants moved out...I sat on the porch and cried. Now I no longer as emotional about the experience. We expect things to be broken and damaged. We know that our version of clean will not be the same as the person renting. We know that sometimes rent may be late (although it is very rare) and we can cover the costs if we need to. We have researched Texas laws pretty heavily, to make sure we are informed and doing things legally. We try to be reasonable people, but not to get sucked in to a person's drama. The biggest problem with a rental property is the timing of things. It always seems that a problem arises, just as we are about to sit down to dinner or right when a tired hubby sits down and mentions time to relax. It has not been a disaster for us, but it can be work. You will have tenants you can't wait to see go and then you'll get someone terrific who you hope you can convince to stay another year or two.

If you are in an desirable area, I would go for renting the house out. Even if your rent the house for the amount of money it takes to cover your expenses, for tax purposes you could still have a loss on paper because of depreciation which is something you don't get to claim when you live in the house. Do the math and crunch the number. If you will actually show a profit even after the depreciation, know how you will be able to pay the IRS their money in taxable income. See a reputable tax professional and ask many questions.

I personally would be inclinded to keep the house and rent it out for the short term and sell it when the market turns around and you would net a hefty profit.

Some items that will reduce your taxable income on the renting of the house are as follows but not limited to: mortgage interest, property taxes, water/sewer bill you pay for the property, property management company fees, any repairs to the property, any supplies or equipment for the property (such as trash cans, plumbing and/or electrical repairs), and professional fees (attorney, real estate manager, etc.). You may want to take a look at the Schedule E on www.irs.gov web site. This would be one of the forms you would be filling out for the income and losses on the rental property. Also Quicken has a wonderful program to help you keep track of your income and expenses on your rental property. It is easy to use and keeps everything very simple for your use and for distributing to your tax professional (their fee would be deductible too).

My landlord bought our house for $60,000 at a foreclosure auction. It's well worth over 100k I moved in immediately and have paid my rent on time or early every month for the last 3 years. I've already paid him $11,000 in rent toward his 60. Contrary to the horror stories, I have actually made improvements to the lawn and take good care of the home. He bought it as a retirement income that will last him the rest of his life. If I were you, I'd keep the house and rent it out.

We are in the same position as you and in the same area as well. After speaking with our realtor she told us we should wait to sell because of how much we would lose. She also does not recommend renting it out. As much as I'm ready to move, I think we might hold off for a while. My husband and I have talked about putting it up, and if it doesn't sell after 2 months, we can take it back off the market. The key is to get a storage and take out pretty much anything that's not a necessity - especially in the closets. Think about how often your kids play with their toys, and you'll probably realize that putting most away in storage won't be a big deal. then, when you move, it will be like Christmas all over when they unpack their "new" old toys. :)
I would say, though, that if you can hold off, you might want to wait. The area you and I live in is not a good place to sell now. We live in a subdivision that started 11 years ago, and they're STILL building with no end anywhere in sight.

I think you are getting some very good answers. You need to do the math - how much will you be paying the property manager vs. how much income will you earn on the house vs. how much would you lose if you sold it now? Does the property manager take care of ALL of the issues (leaking toilet, broken AC, lawn maintenance)? Also, I have some friends that rented their house out to a young couple who had small dogs. They thought that would be okay - but, the small dogs were terrors - they chewed up the wood molding in the house and scratched up all the doors. So, my friends ended up paying a lot of money to fix their house back up after the renters moved out. Who is going to deal with that if that happens to you? You or the property managers? Who is going to clean the house after renters move out? You or property managers? If the answer to some or all of these questions is "you", do you have the time to deal with it? Do you have money put aside to fix problems (and honestly, some of the problems may be caused by the renters - like a broken window).

Just FYI, I sold my house two years ago at a loss. I was pleasantly surprised that if you do lose money on your house, your taxes take that money into account and reduce the federal tax income you owe.

Also, Angie S answered about how quickly her house sold (in three weeks). I did all the same things she did (well, not the statue), but my house was still on the market for 10 months. I even repainted rooms so that the house was all neutral in color. Plus, my yard had a lot of trees and shrubbery that I had planted over the years that other houses did not have. My house was very attractive, but it still took 10 months to sell. And, it was hard to keep it immaculate. I was able to do that, but very fortunately for me, my agent would call me when a client wanted to see the house in the afternoons and I was able to go home at lunchtime and put an extra shine on things - and open drapes and freshen it up. Like Angie did, I seriously declutterd. I sold because I had bought property I wanted to build on and that property had a storage shed. So, I moved a lot of items over there. I left very few toys for my son to play with. And, I had an infant, but she did not have a lot of toys.

Good luck!
L.