Thoughts on the Auburn Area Market? Sell or Rent?

[Kimsua Chay]

Hey BP! So I'm a new member here and I currently own a nice 3 bed, 2 bath, 1 car garage condo up in the Lake Tapps/Lakeland Hills area. I happened upon a great deal on my condo (I believe I found it on Zillow by sheer luck) because of a short sale about two years ago when I was simply looking to buy vs rent as I was tired of moving around each year and trying to remember what my actual address is. I never realized the opportunity that I had stumbled into but I'm in a fortunate spot to really reap the rewards from it now.

With that said, I'm going to have to relocate out of state and I'm looking for some advice on whether I should sell for a sizable profit in this crazy market or keep my condo and rent it out as it can cash flow with the current rent prices in the area. I'm meeting with a property manager next week to get their opinion on things but I'm still trying to do my own research on it for obvious reason. I've also talked my realtor and he says the market is ridiculously hot and that pretty much everything he's sold minus one property has sold over by 5-15k above asking price so now would be a great time to sell. So that basically leaves me with the million dollar question, sell while the value is higher than it's even been for my condo (reinvest a large amount of it elsewhere after) or hold and rent it out for some cash flow?

I've looked (or I believe I have anyways) at all the numbers for renting and at the current rates with a property manager I can cash flow anywhere between $100-250 the first year followed by $170-350 year two depending on what we charge for rent. I could generate even more cash flow without a PM but given that I'll be living out of State and traveling that's pretty much not an option at this point. Ideally I would rather rent and hold but if the rental prices drop over the next couple of years I'll see a potentially significant hit to my cash flow.

The flip side to that is I can simply sell and cash out now while the market is good. I plan on reinvesting a significant chunk of that into other rental properties elsewhere so the profits would go to good use but part of me wonders if its worth holding onto this condo for longer and see if it'll appreciate even more and use the cash flow to pay down the current mortgage even more.

Thoughts?

[Kimsua Chay]

Sorry for the really late reply everyone. I appreciate everyone's input but my work schedule became real hectic the last two weeks and I ended up putting my condo up for sale after all. My plans are to still invest the profit elsewhere in rental properties and slowly build my portfolio over time. 

To answer a few questions though just for anyone else out there reading this and possibly in a similar situation I'll try to respond. 

As far as numbers go, I purchased the condo two years ago as a short sale for 135k. It took about six months to get it all done because the previous owner had two mortgages and we had a tough time getting responses from both. After we finally heard back, they counter offered at 150k (my initial offer was 127k or so) and we settled on the listing price of 135k after I told my realtor that was the highest I would go. I lucked out in finding the place on Zillow I believe as it had one picture of the exterior of the condo but nothing else. I decided to check it out anyways as I was scheduled to take a look at a few short sales and realized that with some work this place had a ton of potential. Of course that was with my original intention of staying for awhile vs flipping or renting it out for a profit. Once the previous owner moved out (that's a whole other story in itself as he refused to leave at the agreed closing date) I found that he had left the place in worse condition than when we last saw it. I had plans to remodel anyways and due to some contacts from my realtor I was able to save a ton of money and ended up only spending just under 9k for a lot of work. That includes a new quartz counter top, re-flooring to included laminate hardwood floors, high end stain resistant carpets in the rooms, new designer paint and trim, new master bathtub/shower and tiles, new tiled fireplace and some other things plus all labor. It was a one man show and took some about a month and a half or so but I wasn't in a rush and it was well worth the wait.

I'm not sure if I should put out too much info yet since we just went under contract but we recently listed my condo and found a buyer within a few days. We had a few offers and went with the highest one as it was a strong buyer basically got what I was hoping to get. Once it's all said and done I'll put exact numbers here but I figure I'll hold off for just a bit for now.

@Ruth Bayang Wish I could have made it but I was out traveling for work and flying a bunch of redeyes. barely had time to eat and sleep!

@Christian Wathne Sorry I'll get those numbers here in a few weeks once the condo closes. I'm not hiding anything but I'm also not sure if I should post anymore numbers given my full name is probably searchable through here.

@Cindy Liu I'm not quite sure when the last major assessment was but they literally just replaced all the roofs here last week. There's an annual $350 assessment they charge every year that plus they recently raised the monthly dues from $271 to $325. I ran that as part of my numbers if I were to rent which was why my rent would have had to have been pretty high to really cash flow any real decent numbers. That said, I haven't heard of anything coming up either but as you said I have no clue if they have anything else planned for the future.