Sell or keep renting? How to decide?

[Lenore C.]

Hi All,

We own a 2 bd/2ba condo in a luxury high rise in downtown San Jose. We purchased it when we lived up there, and then have had it rented for about 5 years.  We are living in San Diego now.  San Jose has a ton of new high rises being built (5000 high rise condos or apartments are in the process of construction, or have been approved for construction, etc).  

Obviously developers think that the downtown of San Jose is worth investing in.  We have about $150K of equity in our condo (after taxes etc if we sell).  We essentially break even on the unit right now. Monthly cost to maintain unit runs about $4k. My concerns are that they could over build, and rents and property values would go down until it the units fill up again.  We could face vacancies and/or have to lower the rent and carry a loss for a while.

it seems that property values should eventually go up, if the downtown gets nicer, busier, has more jobs, restaurants, retail, etc.  Silicon valley needs more housing and jobs are in abundance.  The downtown of San 

I am not sure how to decide on whether to rent again (lease is coming up for current tenants and they are moving out) or sell now?

Any thoughts would be appreciated!

[Nathan Gesner]

$4,000 a month in expenses? You've rented it for five years and are just breaking even?

We are experiencing one of the hottest rental markets in history and you are only breaking even. Others are familiar with the neighborhood and say it's a bad place to invest. You're basically holding onto a really expensive pig hoping the California government will make the right choices and improve the community. Those are some terrible odds.

Dump it and move your money to a more affordable, Landlord friendly state that is on an upswing.