She lives in an apartment close to her work and doesn’t want to move into my house.

My house is worth $450,000, with a loan balance of $248,000, which I had recently refinanced to a 3.35% mortgage rate. 

My suggestion to her is to lease the house when it ends up in her hands. She can get about $2,800 in income, and since the mortgage is just under $1,600 a month, that gives her additional income. And if she does this, that extra money would almost fully pay her rent.

Her other option is to sell, and take approximately $200,000 out of the house.

So my question is, should she sell or should she lease?

Trying My Best

‘The Big Move’ is a MarketWatch column looking at the ins and outs of real estate, from navigating the search for a new home to applying for a mortgage.

Do you have a question about buying or selling a home? Do you want to know where your next move should be? Email Aarthi Swaminathan at [email protected].

Dear Trying,

Ask her to lease this house if you predecease her. Do not recommend that she sell it just yet.

But start working with her now so she can find her feet as a landlord, if and/or when that happens. Together you can see the best ways to find tenants, how to set up rent payments, and how to care and maintain the home.

If she’s not able to take on this responsibility, you can research a property-management company that can help you at a cost. A property-management company typically takes about 8% to 12% of the monthly rate as a fee.

I love that she has a little bit of money left over from the rent if she leases. That will boost her income, give her more financial stability, and help her to put money money aside for an emergency.

Many people in America who are renting dream of owning their own home, so you have helped to set her up for a successful and secure retirement. Plus, that 3.35% mortgage interest rate was a catch. She would be lucky to see that again soon.

I don’t know what medical issues she has, and what other financial needs she may have in the medium- to long-term, but if there’s no immediate and pressing need to draw on that $200,000, why go down that route? 

I truly appreciate how much you have done — and what you are leaving behind — for your daughter. It is kind of you to give your daughter a financial leg-up by willing your home to her. 

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