Should I rent or sell

[Nil Bog]

Hi all-

Not a unique question but one that I've been stressing about for a few months that I'm hoping you can help with.

Stats:
Location: Seattle suburb.
Paid 220k for it in 2007 (not really relevant anymore. We were living in it for a few years))

Currently owe: 120k
Current value (per Zillow): 140k

Rent Revenue:
Current rent 950/mo (Could potentially rent as high as 1100 but we are renting to people who take care of it and we know so we are willing to discount)

Expenses:
600 in interest per month
300 in HOA
200/month to insurance, prop tax

Obviously, at the moment, it is a money loser both from a cashflow perspective as well from a profitability perspective. The question is, keep renting with a refinance? Or sell?

If we refinanced, that would cost 1 or 2k but would drop the interest cost down to $450, so basically we would then be breaking even (except for non-scheduled costs including a $500 move-in/out per renter fee).

So yeah, any reason to keep this place or am I just silly for holding on to it?

Very much appreciate any input!

[Joel Owens]

Hi Nil,

Zillow estimates are not at all that accurate. They can vary wildly all over the place. What you need is a broker/agent in your area the property is located in to do a CMA (comparable marketing analyses) for you.

This will tell you for sale, withdrawns , expired's, sold's in your marketplace. The closing costs paid and other items (seller concessions) should be shown as well. This will help you estimate your closing costs and what buyers are expecting. You take the most recent sold's ( best case the last 30 days ) and deduct your commission costs, expected buyer credits, closing costs, etc. and arrive at your estimate ( net walk away) number.

Another metric you need is the amount of sales price per month your market is rising. Example if the last 6 months 3 of those months prices were flat but the last 3 sold prices were rising 3%, 4%, 5% then optimally waiting 3 more months might net you more or not have you bringing funds to closing.

You need an in depth analysis of how your local market is performing to make the decision more clear for you.

Hope it helps.