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Sub 3% Interest Investment SFH and Foundation Work
Hello everyone!
My wife and I purchased a home in the Seattle area back in 2018. It's a single family home that we were able to refi into a 3% interest rate.
Since then we have moved out of the area and been renting it out for the past few years.
We are slightly negative on cashflow, about $100 a month or so when you account for a 3rd party property management service and expected repairs etc.
Our challenge here is the home is old. The foundation has cracks and the driveway needs to be redone. We have had a Strctural Engineer out to the property and while we don't need to conduct repairs within the next 5 years or so, we will need to address both of these things at some point and it will likely cost us about 100k.
Any advice on selling or holding for the long term?
We always thought we would hold this property as long as we can, and cashflow is not really an issue but thinking about dropping 100k on repairs for a property that is cashflow neutral at best gives me major heartburn.
The home has a great location and has appreciated even with interest rates coming back up, but is certainly not valued as high as it once was.
Thanks for your thoughts/advice in advance!
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@Aaron Simril you can try to sell it and hope a buyer will overlook these issues.
Check your state laws, because in Michigan, you'd be legally required to disclose what you know about any repair issues and would be liable forever.
Appears you may also have the opportunity to sell and avoid capital gain taxes on up to $500k of gains from a sale. Discuss with a tax professional.
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Quote from @Aaron Simril:
Hello everyone!
My wife and I purchased a home in the Seattle area back in 2018. It's a single family home that we were able to refi into a 3% interest rate.
Since then we have moved out of the area and been renting it out for the past few years.
We are slightly negative on cashflow, about $100 a month or so when you account for a 3rd party property management service and expected repairs etc.
Our challenge here is the home is old. The foundation has cracks and the driveway needs to be redone. We have had a Strctural Engineer out to the property and while we don't need to conduct repairs within the next 5 years or so, we will need to address both of these things at some point and it will likely cost us about 100k.
Any advice on selling or holding for the long term?
We always thought we would hold this property as long as we can, and cashflow is not really an issue but thinking about dropping 100k on repairs for a property that is cashflow neutral at best gives me major heartburn.The home has a great location and has appreciated even with interest rates coming back up, but is certainly not valued as high as it once was.
Thanks for your thoughts/advice in advance!
Where is the home located? With the recent zoning changes happening, often times the land value can be quite a bit.
Depending on different factors, primarily lot size and location, we have even been paying $1m+ for houses to tear down in Seattle and $2m+ in the Eastside .
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Hi Adrian,
Thanks for the response. The address is 5456 31st Ave Sw, Seattle WA