Either I cannot seem to find an answer to this on the web or I am using the wrong search terms. I am trying to figure out how to calculate ROI in the following scenario.
Our original primary residence. Bought 18 years ago for cheap and have spent a bit over the course of 18 years renovating it. Original mortgage was $46,000 @ 6.5% (Terrible, I know, but this was our starter home and by the time we were able to refinance, no one would refinance due to such a small amount remaining).
Payoff as of today on mortgage is ~20k. Appraised value is $105k and only expected to rise based on area. Everything in the home is fully upgraded with the past 4 years (plumbing, electrical, roof, foundation waterproofing/draining, new municipal sewer and water connection, etc.) so not expecting a ton of maintenance cost for a while.
We could expect about $5,000 yearly residual initially until paid off and then we could expect rent of around $825 and rising from that point forward.
We bought a new home and are trying to decided on selling our hold home or renting old home. There are definite pros and cons for each scenario.
I feel like I’d need to use a cash on cash calculation, but that may be incorrect and even if it is correct, I don’t know what I need to use to figure that out. Can someone help point me in the right direction?