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Updated over 11 years ago,
Dilemma! Sell or Rent?
Hello everyone, i'm new to the site and thought I would jump in and ask a question that i've been bouncing around for weeks now. This may turn out to be a long read and I apologize. I bought a home in the middle of 2007 in Queen Creek, AZ -- it was my first home. I paid $330,000 + $108,000 in upgrades. The house is 4,200 sq ft and was built by Taylor Woodrow(Morrison now). The market tumbled after my purchase and I was quickly upside down. In 2010 I went through a hardship and spoke to B of A about helping me out. They ignored me, even after I filled the paperwork out, for about 5 months. I finally decided I was going to call them and tell them I would be mailing them the keys to the house. I was going to move into a rental property my father owned in Chandler. Shortly after my call to them I got some paperwork overnighted to me, which was about 50 pages. The following day I came home and there was a white van in my driveway, it was BofA....a long story short - they offered to take $66,000 off the loan (I had a 1st and 2nd - the second was $66,00 and change). They also lowered my interest rate from 4.5% to 2.0% for 30 years. After I had an attorney review it - I signed it and ended up staying. Now, I have the opportunity to move to a larger home in a better neighborhood.
THE PROBLEM : Do I rent the house out or sell it? The house payment is $1220 and the HOA is $105/mo. Landscaping for front/back is $50 every two weeks. A property managmenet Co. said it would rent for $2150/mo. I'm worried that this wouldnt be a good rental -- there are a ton of upgrades in the home - built in movie theatre room, an expensive staircase - just the oils from fingers leave tons of marks, same with all the cabinets. My gut tells me the house would get trashed and I would end up having to pay more in rehab after then I would get in rent. BUT, if I sell it now i'd lose a lot. I owe around $355k, value is at $298k.
What would you do in this situation? There are 800+ homes in my community and the average for upgrades per new home was $32k. I went way above because it was my first home and I simply made bad decisions and got carried away.
Any help or advice would be greatly appreciated. Thank you for your time.
-Brian S.