retirementandpf wrote:interplanetjanet » - We will initially rent in overseas, and perhaps buy an apartment later. I have no intention of buying another house in the U.S. with the proceeds of this one.
I think you missed what she was getting at. You're tied up in *this* specific house based on (in part) an emotional investment in it.
She's trying to get you to imagine that you didn't own a house. That you were sitting here with $350k in the bank. Would you be considering buying a $350k house to rent out while you're gone in this situation? If not, then why would you be willing to rent out the house you have now instead of converting it to $350k?
It's a way to give oneself a different perspective on a financial problem involving sunk costs.
retirementandpf wrote:My wife and I are leaning to sell, but, still we have put quite a bit money into it...
When you find yourself thinking about the money you've spent in the past when trying to decide what to do in a current financial situation realize that you're allowing emotions to cloud reason. It's a very very common fallacy that is very easy to fall prey to. Everyone from individuals to large corporations struggle with it.
In your case the $650k is gone. Mentally treat the entire $650k as having burned in a fire. What you have today is a house. It doesn't matter if you bought the house for $650k or $65k, what matters is what the house can be sold for. Interplanetjanet's mental excersize helps get one in the state of realizing that having $350k and no house is the same as having no $ and a $350k house.
Another way to think of it would be to ask yourself if you were getting a $350k inheritance would you rather it be a $350k house that you can rent out while you're gone or $350k in cash?