Hold Or Sell? Please Help!

[Abigail VanLuvanee]

Hi everyone! I'm looking for advice and appreciate in advance you taking the time to read this long post!! I am embarrassed about the situation so please be kind. I bought a short term rental in the Poconos in PA in August of 2021 with a 6% interest rate for $290k. The loan was for 260k. I got a HELOC on my primary for the down payment. I only put 15% down and I still pay PMI. In hindsight I should not have bought the property in the first place but here we are. All the numbers from the previous year lined up with it making a profit (people may already know where I’m going with this with post pandemic Airbnb trends) however since I bought it the numbers have been horrible. 

In 2023 it brought in around $8700 TO ME (after PM fees (20%), taxes, and everything are taken out) when this places costs me $40K per year between mortgage and HOA fees and all the other incidentals that come with being an owner. The place is outdated and absolutely could get a good makeover. And I have .8 acres so I have room for amenities in the backyard. So part of me thinks a makeover would help the demand go up. It's getting rented on weekends but the daily rate is lower due to the lower demand. Also- I work around 70 hours per week right now so I don't really have the option to manage myself. I'm long distance in NC too so the PM definitely is appealing since they have connections with handyman and stuff. Being honest though the extra 20% back into my pocket wouldn't even come close to breaking even though obviously.

I feel like the obvious answer is sell for a loss. But I'm not sure. There are other properties in the neighborhood that are selling for less than what I paid for mine. My realtor thinks I can list it for $300k. So I know I would take a loss and not get back my initial investment and everything I've put in thus far. But I'm trying to figure out if that loss is worth it based on the current numbers I'm paying for the property every year. The roof will also likely need to be replaced in the next 5 years. I also know the property will likely appreciate but I am not sure if it's worth holding for that. I guess at the end of the day I'm trying to figure out if it would be worth it to hold the property, fix it up a bit and see if it helps with the rents or a minimum help with the resale value. I don't have much capital at all at this point because it has been such a nightmare financially between the property and the HELOC (which is why I work so much).

This was my first property and ABSOLUTELY a lesson learned. I’m still planning to continue investing in real estate once I figure everything out with this property and it makes sense to do so financially and I run a better analysis (since I clearly failed this one). Part of me doesn’t want to sell it and really wants to try to see if I can make it work but I also want to be realistic and not stuck in this situation forever. I appreciate everyone’s insight on the situation. I was so excited when I bought the property and while I am now discouraged about the state of things, but I know I can bounce back! Thank you so much for reading this and for your time and insight!!