Author Topic: Case Study Sell or Rent  (Read 2127 times)

semi-pro stache

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Case Study Sell or Rent
« on: May 20, 2014, 10:37:05 AM »
Looking for opinions on whether to sell or keep my current home as a rental.  Our only debt is the house, combined income is around 100k.  Looking at this as a long term holding for income purposes later in life.

2000sqft Single family home in a gated community
Market Value:   215k
Zillow has 233k, similar houses in my neighborhood have sold from 185-250
Original Purchase price:   195k
Original Mortgage Amount:    153k bought in 2010, refinanced in 2012
Interest Rate:    3.5%
Mortgage Term:    30
Term remaining:    28
Amount remaining on mortgage: 148k
Gross Rents: 1.7k, house next door rents for 1.85k, the one next to that rents for 1.65k
Principal and Interest (the P&I of your PITI - should match with the above info):    687.04
Taxes and Insurance (the T&I of your PITI):    296.60
HOA costs:    60/mo
Deferred maintenance notes:    Needs a new roof and water heater in <5yrs, AC is new
Additional notes    I live in an area with a lot of sinkhole activity, a few neighbors have had sinkholes on their property.

Any advice is greaty appreciated.

Thanks

SDREMNGR

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Re: Case Study Sell or Rent
« Reply #1 on: May 20, 2014, 11:55:33 AM »
I was going to say rent it until I saw the sinkhole thing.  SELL IT! 

It's just a gamble that I personally wouldn't take.  Insurance won't really cover what it will cost you in fix cost and property devaluation if a bad sinkhole hit your house and messed up the foundation.

waltworks

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Re: Case Study Sell or Rent
« Reply #2 on: May 20, 2014, 12:21:37 PM »
The roof and water heater will kill any profits for a LONG time. Sell it, especially if you have been living there and can use the primary residence tax exemption.

-W

D.williams

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Re: Case Study Sell or Rent
« Reply #3 on: May 28, 2014, 01:23:01 PM »
Yea, I would have to agree with the others in this situation. Roofs can be a pain and with all the sink holes popping up lately, I wouldn't want to have any part of it. Especially since you say they are pretty frequent in the neighborhood. Just needs to much work with lots of risk, sell it!

rmendpara

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Re: Case Study Sell or Rent
« Reply #4 on: May 30, 2014, 07:06:05 PM »
I saw all good things until you mentioned upcoming roof repairs (not cheap...), and a looming sinkhole risk...

Sell it. It's not worth the risks. Find another property.

fxsts12

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Re: Case Study Sell or Rent
« Reply #5 on: June 07, 2014, 09:27:46 PM »
Make sure you can insure against the sink holes.  It looks like you should keep it based on the mortgage rate and the selling expenses well eat a chunk of profit.  If end up selling then plan your sale and use a 1031 exchange so you can defer taxes.