Problem property...all suggestions welcome

[Brian H.]

Here are the facts:

1) Bought home as primary residence in Clarksburg, WV shortly after I was transferred there following 9/11. Was an emotional buy but I don't think I overpaid for it. $71,500 in early 2002. The principle balance is currently about $56,000.

2) Took a job transfer early 2003 and subsequently got divorced. I ended up with the house in Clarksburg and as it was already rented out, I opted to keep it as a rental, even though I live six hours away. Long story short, the last family I rented to did a tremendous amount of damage to the house and I ended up putting about $20,000 into it to get it back in move-in condition (May-Sep 2011).

3) House has been listed for sale since Sep 2011. Two different realtors, lots of showings but not one offer. The house started out at a listing price of $84,500 (which was in keeping with comps) but is now listed at $64,500 (I think). Both realtors have told me that the problem as they see it is two-fold...a) the neighbors, who are kind of trashy people on welfare and their house is an eyesore, and b) the house is in a flood plain.

My mortgage payment is only $541 on a 30 year adjustable rate. I'm thinking about refinancing it but only if I continue to try to rent it out, which is not my preference after what I went through with the last tenants. However, I do feel like I've learned some hard lessons and could do better this time around, and I'm pretty sure I can rent it for $650-700. Still...my preference is to sell. Ideally I sell the house, albeit at a loss, and start over fresh in my hometown.

As I've said, I've considered trying to rent it out again. I've also considered marketing the home to investors, knowing I'll only get pennies on the dollar. I've already taken a bath on this place and I'm almost willing to come to the closing table with thousands more out of pocket just to get this place off my books. And as a last resort...I'm considering just moving back into the house so that I can better control the situation, make improvements, save on living expenses, etc. until it's sold. For personal reasons that is an absolute last resort.

If you've read this far, thank you. I'm trying to keep emotion out of the tone of this post but I seriously need help. I've been carrying this place for well over a year now and it's become a serious thorn in my side. Thank you for any and all suggestions.

[Michael D.]

Brian Hudson, I think your biggest mistake here was not using a solid property manager in the 1st place. You can't go back in time, but even now that seems like it might be your best bet.

Ask around, particularly on this website, and interview a number of managers - then put it on the rental market.

Once you've gotten it stabilized you'll be sleeping better and you can look at it again with clear eyes. Maybe you'll continue holding, or maybe you'll decide to sell then. At least you won't be acting out of desperation.

It sounds like you can afford to sweat the negative a little while longer, so try to distance yourself from this emotionally as much as you can. Don't even go back. Do everything through the manager.