Sell or continue renting SFH in St Louis area

[Lesley M.]

Hi there,

I purchased a SFH in Dec 2021 for $99k. I spent about $12k in repairs and upgrades to make it rentable. I rented it for 1 year with minimal issues.

In 2023, tenants moved out and I put in $5k in turnover costs. Then it didn’t pass the city inspection because of landscaping debris and tree branches that fell in my yard, so I put in $5k more.

After 6 months of vacancy, a new tenant moved in and immediately began complaining about everything. I had to replace the fridge, HVAC, and various other repairs that were another $8k or so. She’s been paying rent but we are not renewing with her. She’ll be out by Dec 1.

Given that I’ve been paying about $15k on this property every year, it’s been a money pit. I’m trying to decide if I should keep going, or take this as a learning experience and sell it.

I have a realtor looking at comps to get a sale value. Back of the napkin, I think $130k would be break even. Redfin says its value could be 150-160k, but I doubt that’s accurate, unless the market heats up with lower interest rates.

What factors should I consider?

How can I tell if my experience with repairs and tenants was bad luck? Or if it will continue?

[Michael Smythe]

@Lesley M. suggest getting the best home inspection you can!

Also, put any repairs pointed out by the inspector into the following categories (by priority)

1) Health & Safety - to avoid tenant injury and potential lawsuits
2) Property Preservation - to stop further costlier damages
3) Government Required - city inspection repairs & S8
4) Marketing Negative Impact - who'll rent a house with purple bedrooms?
5) Miscellaneous - anything that doesn't fit in above

Also, keep in mind:

1) Tenants all seem to want a brand-new home - and then want it for "free". So, don't overreact to their maintenance requests.
2) A landlord should eke out every bit of life from a roof, HWH, etc. and put band-aides on it until it makes economic sense to replace it.
3) Maintain to the Neighborhood! Too many landlords want to keep their properties up like they will live in them. 

You'll never make money if you don't follow these principles.