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Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: sara54 on March 29, 2014, 06:55:37 AM

Title: Sell or continue to rent?
Post by: sara54 on March 29, 2014, 06:55:37 AM

Before we were married, my husband owned a condo. We moved just before the crash, but we couldn't sell it. Since then, we've rented it. A few realtor friends have told us that the inventory in Indianapolis (where the condo is) is very low and have encouraged us to list it. We currently have a renter in there now who is possibly interested in renewing the lease for another year, but she would need us to lower the rent in order to stay (she recently started her own business, so her cash flow situation is different than it was when she originally signed the lease last May).

We're trying to figure out if it would be better to try to sell at a big loss, or just renegotiate with our current tenant. We don't like being landlords, and, if we sold the condo, even at a big loss, we would use the cash to pay off our primary residence and my husband would retire. He could possibly still retire with renting out the condo - we would just use the condo income to cover our primary residence mortgage (which is at a very low 2.875 rate, so we're not in rush necessarily to pay it off for obvious reasons).

Here are all of the pertinent details I can think of:

Originally bought condo in 2003: $169K
Paid off condo mortgage in 2013
Lapses in tenants since 2005: total of 6 months
Community fee: $215/month
Taxes: $3500 annually
Insurance: $250 annually
Current rent: $1225
Realtor wants to list condo at: $129,900

We've been waiting for the "market to come back" in this area for nearly ten years. It is a great location, but the neighborhood has many elderly residents who have died and whose kids then sell the properties for fire-sale prices, so our comps are abysmal. If we renew the tenant's lease, we think she would need us to get around $1125ish in order to stay. I would prefer to negotiate with her since she is already in the condo versus trying to get someone in there for $1225 or higher because, even if we find someone in one month, we'll lose the increase in one month of not having it rented (and with advertising fees and the cost of our time in dealing with the headache of re-painting, carpet cleaning, showing it, etc.).

So what would you do?

Thanks for your help and ideas!

Title: Re: Sell or continue to rent?
Post by: phred on March 29, 2014, 07:26:39 AM

What have your realtor friends told you is a realistic sales price?  If the price seems OK I would give it to one of them for 30 days listing.  Since you don't like to be landlords why continue that path?