You wouldn’t get back $300/month in equity if your house is depreciating at 12% annually. You’d be losing $40K/year in equity. If you ever need to sell, you’ll end up owing the bank money, and be in bankruptcy. This could happen if the cash flow drag gets to be overwhelming.
As far as getting the actual numbers, you ought to consult a CPA. May I suggest Michael Gallon, from Savage & Gallon in El Cajon, at 619-440-4780. I don’t benefit from giving out his name. He’s a sharp guy w/ extremely low overhead, so his prices will be good. He could maybe do a phone consultation for you.
I can see why Rich wouldn’t want to give advice. There are some landlords on this forum, and they’ll probably check in during the week.
My question would be: Why would I want to hang on to a depreciating asset? If you believe housing will bust, your only thought would be to unleash the darn thing as fast as you can. In 1999, the answer would be different. In a rational or appreciating market, rental property makes sense.
As far as renting in the new place: I have 3 kids and pets and we love our rental house. We just sold our house in January, and will rent for many years, until prices bottom out. I’ll be watching for leading indicators of a recovery before we buy again.
