Author Topic: Rental Condo Troubles, please advice  (Read 960 times)

moss

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Rental Condo Troubles, please advice
« on: April 14, 2017, 06:48:18 PM »
Can you guys and gals offer some advice?

I have a condo (my only investment property) that is located in far North Dallas. We started a much needed renovation and our contractor flooded the entire condo due to his negligence. The contractor did not have insurance and my home owners insurance refused to cover the damages. The damages came out to $20-$25k. We have had a second water damage incident this week from my upstairs neighbor that could add another $10-$15k in damages. We are not sure if their insurance will cover the damages due to the crazy bylaws we have at these condos and my home owners insurance is again refusing to pay for anything.

Condo Monthly Costs
Mortgage: $609.00
HOA Fees: $284.08
Property Tax: $130.30
Home Owners Insurance: $50.00
Total:  $1,073.38

Potential Rent of $1,200 to $1,300 per month after repairs

My question is what is the smart thing to do.
(1) Fix up the condo and rent it again
(2) Sell it as is with the damage
(3) Fix it up and sell it
(4) Other...

The comps on the condo are $162k and I owe $72k on the mortgage with an 8.1% interest rate. If I keep it, Ill look into refinance it.

Thanks in advance

Another Reader

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Re: Rental Condo Troubles, please advice
« Reply #1 on: April 14, 2017, 07:04:45 PM »
Don't know the laws in Texas, but in places with which I am familiar, the HOA will force you to make the repairs and will prevent you from selling until you do.  That's especially true if other units are affected by the damages that occurred in your unit.  Pretty sure you can be sued by the HOA and/or other unit owners if you don't take corrective action quickly.  You or your insurance needs to file a claim against the owner of the unit that caused the second damage incident.  Is there building insurance paid for as part of your HOA fee?  If so, it may be possible to pursue a claim through that company.

This rental makes no sense financially.  In your shoes, I would sell it as soon as the repairs are made and everyone has signed off on them.

SwordGuy

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Re: Rental Condo Troubles, please advice
« Reply #2 on: April 14, 2017, 07:18:20 PM »
Get the hell out of that condo as quick as you can.  It's a horrible rental.

And until you do, find a better insurance company.

Sue the people upstairs and the contractor if you have to.   They did the damage, they are culpable.

Before you get back into the rental business, learn how to recognize a good deal.   Lots of good books in the sticky posts at the top of the landlord subforum.