Looking for Sale vs. Keep suggestions
Laying out the issue: I am in something of a conundrum. I have a 4/2 rental with about 1800’. I believe fair market rents are $1300, but that is at the top of the market for this community. I could probably rent it within a few hours if dropped the number to $1200.
Here’s where I am finding myself stuck a bit. The mortgage is $1050. With rents in the $1200-$1300 range, there really isn’t much in the way of cash flow. It is a newish house so maintenance wouldn’t be a huge concern, but I have had to put some money into it over the years, but not much. I could continue to rent and allow some debt pay down, but there would be no significant cash flow in my opinion. If I go conservative and rent it for $1200, that would allow for $1800 over the course of a year and then take any expenses out as necessary. Alternatively, I could sell the property. I owe about 112K and believe it would sell for 170k+ (this number is conservative as I think it could go at least 10K higher). After considering 6% (from 170k), 6 months of holding costs, and debt pay off a sale of 170 would leave me with about 41k in profit which I could add to my current resources for more activity. I am stuck b/c I have the thought that having a property in hand is always better than trying to go get one and this one is a good home with few maintenance concerns overall. But the 41k would be a big boon for doing more deals and increasing my current #units from 8 to my eventual goal of 25.
Question: What am I missing in terms of the way I’m thinking about this? What would you give consideration to before making your decision. I am sorry for such a low level stump so to speak, but I am torn on this and my network of support is lacking since I haven’t put the work into building it. I guess this is a first start in that direction. Any suggestions or processes that make sense to you would be helpful. I need to decide soon so I can either fill it with a tenant or get it on the market.
I suppose I should say that I think market ready concerns before a sale include a $3,100 repaint, approximately $1000 in carpeting/flooring concerns, $250 pressure wash, $150 appliance repair. Total: $4500. I guess my 41K number above would need to consider this amount which would drop it down to about 36k and then utilities are a separate amount. Maybe 35K?
Anyway, don’t hold back. :) Thanks in advance to all who respond.