Sell or Rent? VA Loan Primary Residence Turned Into Rental

[Robert Bolton]

I'm not sure if I should sell, refinance or continue to rent. I am active duty military and initially purchased my home for approximately $250,000 with nothing down at 3.75% interest. I lived in the home for about 4 years and have since moved. The home has appreciated about $80,000 but I decided to transition it to a rental property instead of selling. The current mortgage is $1486 and it is being rented for $1600 with property management fee of 10% ($160). This leaves me with a negative cash flow of $46 per month not including all of the other expected expenses. However, the amortization is about $420 per month toward the principal with about $20,000 paid down total and since I did not put a down payment at all my ROI not really calcuable. The area is a very nice long-term area as well. Should I continue to rent, refinance, or sell the property.

[Adam L.]

Originally posted by @Thomas S.:

Any property valued at 330K with rent at a measly $1600 will be so deep into negative cash flow long term that you will lose more money that you can ever imagine.

Sell asap before the markets turn and you lose all your equity. This property is not a investment.

 This is very certainly the case to buy as a rental; however, when transitioning from a primary residence to a rental it can sometimes change.

That being said, I completely agree that you need to sell this property. Never hold on to a property that is taking money from you. Sell the property, get your full VA benefit back, and go buy a quadplex with your VA loan. :)