My wife an I own a zero lot line (as they're called in Alaska, it's 1/2 of a duplex) in Anchorage. We bought it when we moved there, but have since moved to Colorado. Our initial plan was to lease it for 6 months until the spring and sell it then, but that time passed in 2012. We have had the same tenants for 3.5 years. The current lease expires at the end of April, so it's time to decide whether to sell or lease for another year. The financials are as follows:
Present value: $225,000 - $235,000
Current Mort. balance: $185,850
Interest: 3.75%
Rent: $1,600/month
PI: 907/month
TI+FHA PMI: 390/month (taxes are $2,900/yr, insurance is $685/yr, PMI is $85/mo.)
HOA: 75/month
Monthly cashflow: $230
I figured the present value based on a market analysis provided to me last year by a realtor in AK. He is in the process of doing a new market analysis, but I do not expect substantial movement from last year one way or the other. The monthly cashflow does not consider maintenance or vacancy, so is overly optimistic in that regard. However, I do withdraw $200/month from the house to augment our student loan payments and we have a $2,000 emergency fund specifically for this house, on top of the damage deposit.
Rent payments have been early every single month from our tenants. The husband is retired and the wife is a physical therapist at a large hospital. Their daughter moved to AK a year or two ago, and is now buying a house in Anchorage herself. They seem to like living in AK very much.
The boiler was replaced in fall of 2009 and the roof was replaced during the summer of 2013, so I do not anticipate any large maintenance or repair items in the short term. If we sold the home now for $225,000, I would anticipate about $22,000 net proceeds, if $235,000 then $32,000.
I know this home does not meet many (any?) of the fundamentals for long term real estate investing, but that has never been our goal. Our goal was to rent it until we built more equity, then sell. We're comfortable being a landlord, but do worry because the house is so far away.
Our inclination is to continue to rent to the current tenants until they move, then sell. What are your thoughts?