sell rental condo 6 miles from Crystal City, VA Amazon location?

sell rental condo 6 miles from Crystal City, VA Amazon location?

Arlington, VA · Member since 2015 · 22 posts · 1 vote

I have a condo that I used to live in that I've been renting out. Two months ago I put it on the market to sell. The condo is in northern Virginia, 6 miles from where the new Amazon headquarters will be in Crystal City, and 5 miles from where the new Virginia Tech campus will be. It's close to a yellow line metro station that goes to Crystal City/new VA Tech campus. Over the past two months the condo had a moderate amount of viewings, but no offers until now (coincidence?). With the new Amazon hq news, I'm tempted to keep the condo & continue renting it out. I live a few miles from the condo & manage it myself.

Here are the numbers:
Value: ~$230,000 (approx. the same as when I purchased it in 2010... the main reason I put it on the market two months ago)
Rent: $1,600/month (current market rate... might be able to get more but the # of applicants would significantly decrease)
P&I: $800/month on a 2.5% 15 year fixed rate mortgage (with 156 months remaining). Currently ~$220 goes towards interest and ~$580 towards principal. The current loan amount is $106,475.
property tax: $240/month
HOA fee: $360/month
So, a monthly cash flow of only $200, but the principal is being paid down pretty significantly with the 15 year fixed rate mortgage. I have a stable job & emergency savings, & don't need cash flow.
Approx. 20% of my net worth is in this rental condo & my own home (the rest is invested in tax deferred accounts- Vanguard & Fidelity index funds).
If sold, I would need to pay 5.5% in real estate agent commissions & approx. $1,800 in other fees.

If I sold the rental condo, I would either:
1. Pay down the mortgage on my own home by $50,000 to reach 80% LTV (because I only have 5% equity on a 30 year 4.5% fixed rate mortgage with $80/month mortgage insurance).
and/or
2. put the proceeds from the sale of the rental condo in a tax efficient index fund, like VG consumer staples index or total stock market index.

Given this info., would you recommend keeping the condo & renting it out to see if the value/rent increases?

Any feedback would be much appreciated.

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Daniel P.Pro Member
Investor · Winchester, VA · Member since 2017 · 104 posts · 70 votes
7y
@David Cole I would personally keep it as it cash flows and before you know it you will have it paid for which means even more cash flow! Also why sell now if it cash flows, I assume you have no headaches with it and it will like appreciate in value? Do you need the cash for something else?
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  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    7y

    I always think its a better idea to hold onto real estate long term. However I rarely practice what I preach and end up selling properties after about 7 years just like everyone else.

  • Real Estate Agent · Farmville, VA · Member since 2017 · 116 posts · 32 votes
    7y
  • Daniel P.Pro Member
    Investor · Winchester, VA · Member since 2017 · 104 posts · 70 votes
    7y
    @David Cole I would personally keep it as it cash flows and before you know it you will have it paid for which means even more cash flow! Also why sell now if it cash flows, I assume you have no headaches with it and it will like appreciate in value? Do you need the cash for something else?
  • Arlington, VA · Member since 2015 · 22 posts · 1 vote
    7y
    Originally posted by @Daniel P.:
    @David Cole I would personally keep it as it cash flows and before you know it you will have it paid for which means even more cash flow! Also why sell now if it cash flows, I assume you have no headaches with it and it will like appreciate in value? Do you need the cash for something else?

     Other than perhaps paying down the mortgage on my home to get rid of the mortgage insurance, I don't really need the cash/equity from this rental condo.  Right after I made this post here I received another offer... I don't think people are normally thinking of real estate transactions the week of Thanksgiving.

  • Gloucester, VA · Member since 2017 · 21 posts · 2 votes
    7y

    Maybe just hold onto it until Amazon is starting to hire in the area?  Since it cash flows, it's not going to hurt you, and I would think the demand for condos, etc will go up probably increasing values in the process.  

  • Rental Property Investor · San Diego, CA · Member since 2018 · 242 posts · 234 votes
    7y
    @David Cole I made the mistake of selling a couple of condos “income producing Assets” Assete About 15 Yrs Ago. That cost me $500k plus Because your condo is $200 month positive , simple do nothing , let your tennet pay down your debt and in 15 yrs the condo will be worth a lot more. You hit the lotto with this location because of Amazon... keep it
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