Author Topic: case study: rent or sell CO  (Read 1096 times)

tmitchell

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case study: rent or sell CO
« on: August 19, 2016, 08:30:18 PM »
Ok, I've run the numbers and have an answer for myself (I think) but would love you all to chime in now that I'm savvy to the sticky (thanks arebelspy!)

Market Value: 325k
Original Purchase price:250k
Original Mortgage Amount: $187,125
Interest Rate: 3.875
Mortgage Term: 30 yrs
Term remaining: 26.5
Amount remaining on mortgage: 168k
Gross Rents: $2000-2200 (this is an estimate per a management company)
Principal and Interest (the P&I of your PITI - should match with the above info): $1209/mo
Taxes and Insurance (the T&I of your PITI): $3613/yr
HOA costs: $500/yr
Deferred maintenance notes: will need to put property under management, appx 8% of gross rent.
Anything else special or unique in regards to the numbers of the property (not the property itself; things such as city assessments, back taxes, special costs due to unique features of the property, etc. etc.): Prior to considering this sale, my mom was living here and paying below market rent. She's downsizing to an apartment now, so the question is: do I keep it and rent it out. I live out of state and will have to contract a management company to do so.

thanks!!

waltworks

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Re: case study: rent or sell CO
« Reply #1 on: August 19, 2016, 08:37:08 PM »
Fails 1%, fails 50%, no special emotional attachment or reason to hold. Sell.

-W

clarkfan1979

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Re: case study: rent or sell CO
« Reply #2 on: August 21, 2016, 01:29:12 PM »
Did you buy 3.5 years ago? If you want to be a landlord, it could be good practice to rent out. Try it for a year. If you don't like it after one year, then sell it.

It looks like your total costs are $1710 + repairs ($120) + capital expenditures ($120) for a total of $1950. This does not include any vacancy.

It doesn't look like you have much room for cash flow. As a result, if you decide to rent out make sure you have at least 6 months of carrying costs in case things don't work out.
 




tmitchell

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Re: case study: rent or sell CO
« Reply #3 on: August 28, 2016, 07:31:11 PM »
thanks you guys. it definitely seems like selling is the way to go since the cash flow is edging on negative.

appreciate your responses!

best
t.