The House - Rent or Sell?

The big and immediate dilemma that faces us currently is what to do with the house. We live in a nice little 1930s deco city house in a great neighborhood in South Minneapolis. It has a small front yard and a beautiful, private English garden in the back. We really like the house, the neighborhood and the proximity to the city center (it takes me 12 minutes to get to work). It would be hard to find a better place for us.


That said, it obviously is a huge investment that cannot be left empty for two years. As well, I would really like to be a liquid as possible if I am going to be overseas for any extended period of time. The market in this part of the world has not really been impacted and Realtors with whom we have spoken have indicated that we could most likely get what we paid for the house 3 years ago. I want take this opportunity to thank my sisters who, amidst adamant protests and endless debates over house size and affordability, insisted that I move to South Minneapolis, otherwise we would currently be in the disaster which is the Twin-City suburban housing market.

So, rent or sell? We have spoken to both Realtors and Property Managers in the area and, after two agonizing weeks of debate, have finally reach a decision. We will rent! Now both arguments have merit. On the one hand, selling relieves me of all the responsibility and worry of the asset. It makes me more liquid and frees up the cash to work somewhere else. Renting, on the other hand, retains the asset, provides a potential income stream and actually reduces my taxes (which is important because apparently the president has an issue with people at my tax level). So all in all it makes more sense, at least for the next two years to rent it out. To be honest, though, the real factor that tipped the scales for me was the Real Estate Agent's commission. Holy Crap!

Just on principle, this pisses me off! I would never begrudge someone a living, but the way the game is rigged, you have no choice but to pay an outrageous fee for someone to sell your home. I get there are associated expenses, but to be able to snatch $50,000+ on a single sale seems a little high (unless your associated expense is a new BMW). There are people who do not make this in a year. Forget Wall Street reform, how about capping the yield in this little racket (and Hollywood actors while were at it). The best part of it is that it is totally unnecessary. This little band of larcenist have cleverly created all sorts of forms and rules, so that John Q Public does not have a chance. This will be the 4th house I have purchased (companies have always paid the fees, hence why the shock this time) and the process is very easy. You make an offer, the offer is accepted, you hire an inspector, you pettifog (look it up) over the report, you settle, sign the papers, pay and you have a new house. Done! The Real Estate community would say, "Well, that is not exactly that simple" - and I would agree, because the freak'n Real Estate community has made up all the complicated rules! I also understand that the actual agent is at the bottom of this iniquitous food chain, so I hold no personal grudge, but will simply vote with my dollars and withhold my 6%.

Anyway, we will be renting the house. Check that off the anxiety list!