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Updated over 5 years ago,

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3
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2
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Tracy Hutter
2
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3
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STL landlord new to BP - sell or hold?

Tracy Hutter
Posted

Hello BP fam!  I'm new to the forums and only started listening to the podcast a couple months ago.  I'm still working my way through the episodes and this website.  I am a tax CPA practicing in a mid-size public firm in St. Louis, MO.  I've been an accidental landlord for about 6 years.  My husband and I bought our first house at the height of the market in early 2008.  We were still underwater when we decided to move in 2014, so we rented out the house to avoid a short sale.  I've learned so many hard lessons over these years--I wish I would have discovered BP much sooner!

My current tenant is moving out this month, so we are now at a crossroads.  Sell or keep renting?

Reasons to sell:
-In the past, the pool of renters has been pretty poor.  The market was flooded with rental properties and it was difficult to find a decent tenant.  2 years ago, it took almost 3 months to find an acceptable tenant with the help of a realtor.  
-Has not cash-flowed hardly at all in the past since our mortgage payment is so high. We bought it for $0 down like a couple of dummies. Can't refinance since there's no equity.
-Self-managing can be stressful while working tax season overtime hours.  I tried a PM at first, but they were basically worthless.
-More bad than good experiences with tenants has left us with a bad taste for landlording and this house in particular.
-Too far from home. We would prefer a property closer to home so it's not a big deal to drive over and take a look at something. It's 30 minutes away. Maybe we're just a couple of whiners...

Reasons to keep renting:
-The rental market has possibly improved since 2 years ago.  Market rents seem higher to me.  And I've been getting a lot of mail from wholesalers.
-I think I could get it to cashflow about $175-$225/mo with new tenants.
-We know the house quite well and don't foresee any high-dollar maintenance issues coming up soon.  Fairly new appliances, etc.
-We might not be able to sell it for what we still owe on it, plus selling costs.  We are just now getting to the point where it is worth slightly more than the mortgage balance.  
-Closing costs and repairs are already sunk costs, as opposed to buying a new rental closer to home that would involve an additional cash investment. 
-I'm genuinely interested in rental properties as a wealth-building and financial independence tool.
-I've already gotten past the learning curve (I hope), and I plan to keep educating myself through BP.

I may post it for sale in some local RE groups for a week or two, and then list for rent if there's no interest.  Thoughts?

I'm so grateful for this community!  Happy RE Investing!

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