Author Topic: RENT or SELL case study  (Read 542 times)

tag

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RENT or SELL case study
« on: July 26, 2018, 04:09:06 AM »
Help!

We've been on the market for over 2 months and have had zero "bites" in that time and our market is not a seller's market. We are moving across the country next week to a 1400 sq ft paid-for house in a LCOL area. We are FI but husband is keeping his job because he LOVES the project he's doing right now. He'll probably pull the plug in 1-2 years. I have my own business that I love and work part time.

If the house sells we will use that money to close on a vacation/airbnb home a couple hours from our new primary residence.
Until it sells, we'll close on that house using our HELOC which is a very low interest rate.

Market Value:  $690k - $730k
Original Purchase price: $592k
Original Mortgage Amount: no mortgage
Taxes and Insurance (the T&I of your PITI): $7k property taxes
HOA costs: $1200/yr
Maintenance notes: house just went through many updates ie new carpet, hardwoods, painted walls/trim/doors, brand new dual zone HVAC, roof is 6 years old....
weaknesses relative to our neighborhood and comps: 2 bays in garage instead of 3, no 5th bedroom, kitchen is a B- (a bit small and considered somewhat outdated due to countertops)

If you include 6% realtor fees, we break even around $700k.

What would you do?!?!

tralfamadorian

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Re: RENT or SELL case study
« Reply #1 on: July 26, 2018, 06:19:33 AM »
Not enough information. What is market rent for the property and what is the vacancy rate for similar properties in that area?

tag

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Re: RENT or SELL case study
« Reply #2 on: July 26, 2018, 06:29:50 AM »
It would rent for ~$3500/mo.

How do I find vacancy rates?

tralfamadorian

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Re: RENT or SELL case study
« Reply #3 on: July 26, 2018, 09:02:14 AM »
It would rent for ~$3500/mo.

How do I find vacancy rates?

In primary and secondary markets, you can find vacancy rates via google. But at ~$3500/mo, there is no reason to go further. Your money would be much more productive in index funds or real estate with better numbers. If itís not moving at the current price, then the extra bed and kitchen are worth more in your market than you and your realtor previously estimated. Time for a price reduction!

Mother Fussbudget

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Re: RENT or SELL case study
« Reply #4 on: July 26, 2018, 10:38:32 AM »
You're seeking a retail sale.  Two strategies I've seen recently that work well:
1) New listing:  list at 10% desired price point.  Indicate all offers will be considered, and the winning bid selected on X date/Monday.  Have constant open houses over a sunny weekend.  Advertise via postlets (acquired by Zillow), tenanttalk, etc.  This has the best chance of causing a 'bidding war'.
2) Existing listing:  Raise the price by $10K.  1 week later, LOWER the price by $5K.  Three days later, lower again by $5K. +3 days, lower by $5K or $10K.  Repeat. This causes the email alerts of any home buyers in your area to be set-off with 'price reduced' messages.  You'll get more showings, and hopefully an offer.  I saw a realtor this with a 2-week listing that went pending yesterday.  One *could* start by upping the price on the first price change, then changing from there.  Let it sit for a week at the new price before changing it BACK to the original price,  then -$5K, -$5K, etc.  Remember:  to the seller, a $5K change is >1%, but to a buyer, it's a BIG DOLLAR CHANGE  - Five THOUSAND Bucks!

All the best!

waltworks

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Re: RENT or SELL case study
« Reply #5 on: July 26, 2018, 11:02:27 AM »
There's no need for any weird trick here. You've had no interest, so your price is too high. Drop it by $20k and see what happens.

It's a terrible rental regardless, so you need to get it sold one way or another.

-W

Mother Fussbudget

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Re: RENT or SELL case study
« Reply #6 on: July 26, 2018, 01:23:21 PM »
There's no need for any weird trick here. You've had no interest, so your price is too high. Drop it by $20k and see what happens.

It's a terrible rental regardless, so you need to get it sold one way or another.

-W
Yeah... in the end I'm with Walt on this one

Finances_With_Purpose

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Re: RENT or SELL case study
« Reply #7 on: July 26, 2018, 09:51:18 PM »
There's no need for any weird trick here. You've had no interest, so your price is too high. Drop it by $20k and see what happens.

It's a terrible rental regardless, so you need to get it sold one way or another.

-W
Yeah... in the end I'm with Walt on this one

I would sell with that math.

Dicey

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Re: RENT or SELL case study
« Reply #8 on: July 26, 2018, 10:21:55 PM »

2) Existing listing:  Raise the price by $10K.  1 week later, LOWER the price by $5K.  Three days later, lower again by $5K. +3 days, lower by $5K or $10K.  Repeat. This causes the email alerts of any home buyers in your area to be set-off with 'price reduced' messages.  You'll get more showings, and hopefully an offer.  I saw a realtor this with a 2-week listing that went pending yesterday.  One *could* start by upping the price on the first price change, then changing from there.  Let it sit for a week at the new price before changing it BACK to the original price,  then -$5K, -$5K, etc.  Remember:  to the seller, a $5K change is >1%, but to a buyer, it's a BIG DOLLAR CHANGE  - Five THOUSAND Bucks!

All the best!
DH and I own rentals in a large Senior Community. We're always looking for our next BRRR, so we pore over the listings. When we see shit like this, it's a total turn off. Just saying. If your house is priced right for the market, you don't need to pull shenanigans to "trick" buyers.
Otherwise, I agree with the chorus - sell it and move on with your awesome life.

Mustache ride

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Re: RENT or SELL case study
« Reply #9 on: July 27, 2018, 05:43:29 AM »

2) Existing listing:  Raise the price by $10K.  1 week later, LOWER the price by $5K.  Three days later, lower again by $5K. +3 days, lower by $5K or $10K.  Repeat. This causes the email alerts of any home buyers in your area to be set-off with 'price reduced' messages.  You'll get more showings, and hopefully an offer.  I saw a realtor this with a 2-week listing that went pending yesterday.  One *could* start by upping the price on the first price change, then changing from there.  Let it sit for a week at the new price before changing it BACK to the original price,  then -$5K, -$5K, etc.  Remember:  to the seller, a $5K change is >1%, but to a buyer, it's a BIG DOLLAR CHANGE  - Five THOUSAND Bucks!

All the best!
DH and I own rentals in a large Senior Community. We're always looking for our next BRRR, so we pore over the listings. When we see shit like this, it's a total turn off. Just saying. If your house is priced right for the market, you don't need to pull shenanigans to "trick" buyers.
Otherwise, I agree with the chorus - sell it and move on with your awesome life.

Agreed. That's terrible advice. Price it right and it should sell in a few weeks. Once you start lowering the price buyers sense blood in the water.

tag

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Re: RENT or SELL case study
« Reply #10 on: July 29, 2018, 05:09:30 AM »
Yea, we are not looking to play real estate games. Financially we are not desperate to sell at all. We want to move on. We just want to move on with our life and not have to think or talk about this house anymore. We just want our brain space back.