Author Topic: Help me decide when to sell my condo  (Read 1592 times)

BlueHouse

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Help me decide when to sell my condo
« on: March 18, 2016, 02:37:56 PM »
Bought:  2005 for $354K
Current Principal owed:  $221K  on 3.00% ARM that resets yearly
Current sales value (from similar units online):  about $300K
Payment:  PITI:  $1560
HOA:  $300/month
Rent:  $1600/month.  I've never increased rent in 4 years.  I could probably increase it by $50. 

The math doesn't add up and I'm losing money on it each month, but there are some other reasons that may make it worthwhile to hang in there a little longer. 

Reasons to hold:
  • Metro coming to area (2 blocks away) in 2018.  May increase rental prices or sales price.
  • I am grandfathered in to being allowed to rent my unit, while new buyers cannot until owner-occupied ratio reaches (some other number)
  • I like feeling as if I have someplace to go if the SHTF at my job and I can no longer afford my new home
  • I may want to move back in the future for potential age-related problems (hopefully a long way away)
  • Every person who goes there says "don't ever sell this place".  Clearly others think it's a great location and good investment, even though the numbers don't work in my favor.
  • I liked the idea of having multiple income streams and sources of revenue into retirement
  • Great tenant
Reasons to dump:
  • Losing ~$300 every month
  • No control over condo fees and they just keep rising every year
  • Every person who sees this on paper (unemotional) says "sell now.  dump it"
  • Still holding out hope that it may someday appreciate in value and that I can recover some of the costs

Should I hold out for 2 more years for metro or should I dump it asap?  [/list]

yyc-phil

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Re: Help me decide when to sell my condo
« Reply #1 on: March 18, 2016, 03:21:31 PM »
Following the replies, because I am in a very similar situation with an incredible rental loft in one of the coolest part of downtown Calgary (when I bought it, that part of downtown looked like an abandoned city in Siberia) except it has a "false" positive cashflow simply because I put too much down payment when I bought it (facepunch here...but that to my defense, I bought it in my pre-MMM days for my mother who was supposed to relocate there but never did). Even with the economic downturn in Alberta, it still rents easily for $1700/mo and could increase it to $1800, and I would not mind living in it when the time comes for me to be near medical services.

DirtDiva

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Re: Help me decide when to sell my condo
« Reply #2 on: March 19, 2016, 07:03:13 AM »
How much of your PITI goes to principle?  How likely is the place to need an expensive repair or condo assessment fee in the next few years?   How much does it impact your cash flow to cover the monthly gap?

Can you decrease your expenses (interest, insurance?)

And, how likely is it for the SHTF at work?  Would you have any interest in downsizing to the condo after FIRE?

What does your gut tell you?

BlueHouse

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Re: Help me decide when to sell my condo
« Reply #3 on: March 19, 2016, 01:37:16 PM »
How much of your PITI goes to principle?  How likely is the place to need an expensive repair or condo assessment fee in the next few years?   How much does it impact your cash flow to cover the monthly gap?
$713 goes to principal. 
I just laid out $4200 for a water heater a few months ago. The only other thing that can go is the furnace/AC.  And that's an expensive system because it's closed loop and connect to the water heater. 
It doesn't affect my cash flow.

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Can you decrease your expenses (interest, insurance?)
Not really.  Everything is at the minimum right now. 
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And, how likely is it for the SHTF at work?  Would you have any interest in downsizing to the condo after FIRE?
I think I might be good for a few more years at work.  If I am, I can get to FI in 5-7 years.  I wouldn't mind going there if my health degrades and if I have to cut expenses dramatically before my mortgage is paid off.  But it's no longer my first choice.
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What does your gut tell you?
4 years ago, my gut said hold it.  Wait for price to recover.  Wait for metro.  Now I'm not so sure.  I don't think I really want to live there again, but I'm afraid that if I let it go, it will cost me even more to find a small 1-BR place to live if I need it.  If my tenant moved out tomorrow, I'd put it up for sale rather than risk another tenant.  He's been great, but so have I as a landlord.  I sort of wish he would decide to move out.

mozar

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Re: Help me decide when to sell my condo
« Reply #4 on: March 19, 2016, 08:50:18 PM »
You live in DC, but the condo is near Dulles? So you are going to lose 7,200 over the next two years (300 a month). Do you think you'll sell for more than three hundred and seven thousand in 2 years? I think that's entirely possible. but I doubt you'll ever break even on a sale. If you hold for years and years, inflation will start eating at your possible profits. The other option is to wait 2 years, then raise rent by 300. If you are worried about losing your job and not being able to afford your house in DC (if you own), I would say you are over-leveraged.