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. 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
Monthly mortgage payment: $540 (we have about $50K balance on mortgage)
Lapses in tenants since 2005: total of 6 months
Community fee: $215/month
Insurance: $250 annually
Total monthly costs: $776
Current rent: $1200 per month
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, she can't go over $1000/month in order to stay. I would prefer to either renew with her or try to sell it because we just aren't cut out to be landlords at this stage in our lives, but I also hate the thought of taking that big of a loss on selling it now (even though I doubt the prices there will recover much there in the next few years). We will also probably need to put at least $2500 into the condo just to get it on the market (new carpet, painted, other maintenance issues).
So what would you do?
Thanks for your help and ideas!