bought a rental, should i take the loss?

Question

Hi,

Looking for some advice. I bought a rental sight-unseen 3 years ago through a friend. The purchase price was 56k, which, in retrospect was rather high for what it is. The first year was great and brought in 950/month without fail. However, the second year was a bit of a disaster, bad tenants, worse pm, water damage and cost me all i had made in the first year. The 3rd year has been mixed, new pm, new tenants, one pays on time, the other is looking like needing an eviction. The price of the property was listed as 26k but has risen to about 30k. What would you do if in my position? Sit and hold?

Thomas S. · Answer

Do a proper eviction not cash for keys, hire a new PM that will do a better job, do not lower your rent below market as it will only attract worse tenants.

In a C/D class area management is very intensive and must be something you stay on top of at all times. If you can not better manage the property yourself I would suggest you sell and take the loss. Probably not going to get better if you can not step up to the plate.

Christopher Shawn eady · Answer

Check many realty sites and try like I said cash for tentants keys is cheaper than eviction court and charging a lil rent increase to new tentant

Simon McBride · Answer

Thanks julius john, don't I know it

Simon McBride · Answer

Hi All, Thanks for replying. Value came from Zillow. Asked a local realtor what he would list it for and he claimed zillow price. Friend made 3k out of the wholesale on it. Both seller and wholesaler have made attempts to help deal with some issues and bad pms after sale so don't feel TOTALLY ripped off but it doesn't feel great. Neighborhood is pretty bad - still bringing in 500/month. Maybe I'll push on the eviction. I really just want to rent to some nice old people that i'd charge lower rent to......

Christopher Shawn eady · Answer

how since a rent increase on existing tentant! And Eviction of other tentant or pay bad tentant! Give bad tentant 550.00 to move out give u the keys  as he leaves the unit! Cheaper than court cost for a eviction! And raise rent in new tenant! And use cozy  app all is done on linecharges new tenant on line all u do is collect the checks!

Levi T. · Answer

Where did you get the 26k-30k price point from, Zillow?100x rent is 95k market cap... must be in a bit of a bad neighborhood to have that low of value vs rent.