Monthly mortgage is greater than rent - What to do?

[Richard Rohrbough]

Hello BP friends. I need your help on what to do with my rental.

My monthly mortgage payment is greater than the rent I can get by $150 and the 2023 taxes are going up another $150/month.

I’m sure this is a common issue, so what are my options beyond the three I can think of below? Anything creative?

1. Ignore it/deal with it/subsidize it with other properties until someday rent catches up with my payment (meanwhile equity should have grown).

2. Make a large payment against the mortgage and ask the mortgage company to re-amortize the loan so that my monthly payment is less than what I can get for rent.

3. Sell the house (and make a better purchase on the next property).

[Bill B.]

Check your amortization table. If you’re paying off more than $150/mo you’re making money. Tax free money at that, and more each month. Would it really change anything big picture if you had an extra $151/mo coming in? If so, then sell now! Otherwise imagine how many things could cost you more than $1,800/mo. 

What’s a 5% rent increase next renewal so to the numbers? And another 5% the next yer? Unless you plan to only own it for a year or two next years number mean almost nothing. Consider it a retirement account, does anyone expect their 401k to cashflow?