1% Rule

The 1% "rule" is not a rule, but a rough guideline for deciding whether it is worth digging into a property. It is also based on the purchase price, not the monthly mortgage payment. Most importantly, it does not work in every market, especially high cost of living markets.

As someone else said you need to run the numbers on your current situation. Doesn't sound like a long term rental will work unless the home has amazing appreciation potential and you have a ridiculously low interest rate and don't mind losing $200+/month (this will be higher with maintenance and Capex). Short or medium term rental may work especially if your girlfriend's place is already furnished so you can just leave your stuff there. Check out AirDNA or PriceLabs or FurnishedFinder to get estimates. Selling and taking those capital gains potentially tax free may also be a great idea - you can then use those funds as a downpayment on a better market for your long term goals.

Hi there -- Just a few thoughts...

Bigger Pockets has a rent estimator: www.biggerpockets.com You can look at listings in the area to see what other rentals are going for. You could try to rent the house furnished, month-to-month (for example, to traveling nurses or others who need medium-term housing), or do a short-term rental (if local regulations allow) -- both ways to potentially earn more rental income. You could also list it for rent and see if you get any bites at whatever amount you want. However, if rents in the area are ~$2,500 and your mortgage is ~$2,700, then it sounds like it will be tough to rent profitably when you factor in all the other costs of ownership.

If you've lived in the house for at least two of the past five years, you can sell without paying capital gains tax (but please confirm this with your tax advisor before going this route). You could then take the cash and invest in a market where the rental would cash flow.

Or, if you think property values in the area will grow, you could take the loss for now and hope to reap the benefits longer term. Some might call this speculation, but I think it depends on how confident you are in the market.

Just a few ideas! The best approach may depend on your goals and why you want to include real estate in your portfolio (cash flow, long-term wealth building, tax benefits).

I forgot to mention that the current estimated price is $483k and I owe $395k.