Thank you in advance for your time! I am a long-time reader of the blog and relatively recently joined the forum. I've been doing a lot of reading here and have learned tons. We're moving to a new place, and we've been leaning towards selling our condo since cash flow didn't look great, but rents have been going up so I'm wondering if we should keep it to give us an alternative cash flow vs stock, and some diversification. I have to admit I wouldn't buy this property for rental (doesn't make the 1% rule AND condo fees and RE taxes are high), but since we own it already, does it make sense to keep it?
The condo is in a well-kept development and is a desirable unit on the river with an extra covered parking space, FWIW. The rents have been going up and the latest "going rate" for units in this complex in general (not waterfront) is $1,900.
The monthly costs including mortgage, taxes, condo fees etc are $1,617 per month, broken out as follows:
Mortgage $1,248 (last statement: principal $303, interest $595, escrow $350 - about $350 annually for insurance, the rest is RE tax)
Condo fees $346
Water $23
Total $1,617
The original purchase price was $225,000 October 2012, with a mortgage of $180,000 at 4.375%. We never refinanced because we've been planning to move (and sell the condo) since I discovered MMM. The current balance is $163,305.
Another unit on the river just sold for $242,000, so we are asking $245,000. We are estimating a possible net of $65,000-$75,000 depending on closing costs, not getting asking price, etc.
So best case gross revenue is $22,800, with expenses of $19,404, or $3,396, or 4.5% of the $75,000 highest expected net sale proceeds. That seems fairly decent to me since it will require very little of my time - the condo association does all landscaping and snow removal, etc.
Also, we could probably rent the covered parking spot separately. I have no idea what this would rent for, but I'm thinking maybe $50 per month? That would increase the return to 5.3%.
Any thoughts?
The biggest downside I can see is that vacancy would eat up any profit fairly quickly; on the other hand I don't expect too much vacancy based on the way things sell around here. This condo is in Chelmsford, well north of Boston but within commuting distance.
Thank you,
Susan