Houston Real Estate Forum
Market News & Data
General Info
Real Estate Strategies

Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal


Real Estate Classifieds
Reviews & Feedback
Updated almost 2 years ago on . Most recent reply

Rent out condo or sell at a small loss?
Hello,
So I bought a condo here a year ago when I moved down, and now it looks like I'm most likely going to have to move soon. I think I could rent it out and even if I hire a management company still breakeven or make enough to pay the mortgage/escrow (taxes, insurance, etc.). However, my HOA fee is stupidly high (not low when I bought but raised $110/month since then) and would put me underwater somewhere between 3-500 a month I think. I would be able to afford this as basically a bill on top of my rent whenever I move (because my rent would most likely be cheaper and salary same or higher). In my head, at least half of this loss is basically a savings account since it will go towards my principal. But otherwise, I estimate I need 2-3% appreciation annually to justify taking this hit.
My dilemma is that I still feel like the property will appreciate and I don't really want to be out of the game completely, but also doesn't seem like I'll realistically be able to rent out for a profit right now, even if I did it myself without a manager. It is located in Montrose and it's on the top floor of a mid-rise with views of downtown from the balcony and living room. So I feel that the location is very good and not unlikely to grow further. Think I've thought through most of the logistics but mainly asking this question to see if there's anything I might not be thinking of or see if anyone else here has experienced something similar and what you did?
Thanks!
Most Popular Reply

I agree with @Jason Hirko that time value of money is a consideration. One way to do that might be comparing your proforma using the rental tool to what options the cash flow from not carrying the mortgage and maintenance would produce if reinvested somewhere else.
Also, you didn’t mention if this is as a long, medium or short term rental. You could potentially make more with a different strategy and be able to cover your expenses. I hope this was useful.