LTR Not Performing: Need advice on next steps

[Adam Walker]

I wanted advice on how to approach my LTR in Durham, NC that is underperforming and struggling to rent.

I have a 2 Bedroom 1 Bathroom 800 SQ. FT property located in Colonial Village in Durham, NC. This is a brand new construction and is located on a flag lot.

Originally I listed the property for rent around $1,700/month and the interest was very low. Fast Forward to now and it is sitting at $1,450 and we are in the middle of summer and still struggling to find a Tennant.

There have been plenty of showings at the property and the inquiries are plenty (over 100). Unfortunately only about 5 applications have been fully submitted and all of them have failed to show proof that they can afford to pay the rent and provide the proper references.

PURCHASE PRICE AND MORTGAGE:

I purchased the property for $270,000 put 25% down, and it appraised for $290,000.

There is a complete identical property to mine directly behind my unit and it sold about a month ago for $280,000 the same day it was listed. My mortgage is $1,773, so as you can see I am pretty upside down on this property if I rent it at $1,450. The numbers have not been what I thought they would be.

MY PLAN:

My plan was always to refinance the mortgage when rates dropped in the future, so my hope is that my mortgage would eventually come down to around $1,500-1,550 which then makes my numbers closer, as rental prices increase over time.

For reference, I do have an identical property on the south side of Durham which rents for $1,260 and has had tenants in it for 3 years with a renewal just completed. So there is interest in these types of homes but I’m second guessing myself now if they are just to small and not so practical with such a small yard space.

Personally, I don’t love the idea of selling. I have done the work to close on the home in a great market and my strategy is buy and hold. I do like the smaller homes because they are brand new and maintenance costs will be lower. I love my job and I’m not looking to get out of my 9-5 at all. But like I said, I have become more anxious with this home. Is this just short-term fear and mindset or should I sell and look to deploy my cash elsewhere? Also this is just my second property so I am relatively new to the scene  

Thanks everyone.