Market value: Currently listed at $169,000 ($10k in price cuts in the last month)
Original purchase price: $195,000
Current mortgage amount: $181,804 ($8,500 @ 0% interest, $173,304 @ 6.75% interest)
Mortgage term: 30 year fixed, 24 years, 4 months left
Gross rents: Most recently rented at $1,250/mo, currently vacant
P&I: Need to look this up, roughly $1,240/mo
T&I: Also need to look this up, taxes were $3,800 this year, insurance about $800/yr, so figure $385/mo
Total monthly mortgage payment: $1,626
No HOA fees or deferred maintenance.
I have held this property vacant since April and on the market since June. Interest in the property has been light (1-2 showings per week, no second showings yet), so I agreed to cut the price $5k on July 4th and cut the price again another $5k last week. Feedback is generally that the property is too small for their clients, and that the price is a little high but in the right ballpark. The property is about 700 sq ft, 2bd, 1 ba, fully renovated about 10 years ago.
Currently, I have $34k on hand to pay for the sale of the property, figuring I will pay ~8% of the sale price in transaction costs (realtor fees and state/local transfer fees & taxes). At a sale price of $163,000, I figure that I will pay roughly $32k out-of-pocket.
I am able to cash flow keeping the rental vacant for the time being, but doing so gives me little margin of error in my budget, and slows my progress on making extra payments towards my other debts ($160k of student loans, a $22k personal loan taken to facilitate the sale of the property, and $10.5k of credit card debt at 0% interest through Sep 2015).
My current plan is to keep the property listed through the end of September. I’m willing to cut the price as much as $10k more. I am not sure if I will be financially able to sell any lower than that.
If there are no offers on the property by the end of September, I plan to pull it off the market, rent it back out, and focus on paying down my mortgage enough to be able to refinance, and then reevaluate putting it back on the market in another 1.5-2 years when I am in a stronger financial position. For refinancing, however, I’m not sure what it would appraise for, or what kind of rate I could get as a landlord.
If you were in my shoes, what would you do? Keep it on the market through the winter? Try to rent it below market rates & keep it on the market? Pursue a short sale?