Fix up and rent, or sell and move on?

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You admittedly don't know what you are doing with a renovation. Odds are you wouldn't know how to handle a rental, either. You can't dig yourself out of a hole. Sell it, count your blessings, get a little more education, and then try again.

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In the grand scheme of renovations, those are all small things to fix and update. I wouldn't stress about them, just find a talented handyman/woman that you trust to help you get those things done. Here's how we decide to sell or rent: if the cash we make from selling is greater than the cashflow we would receive over five years of renting, then we sell. That's it, simple. That formula might not work for you, but you could modify the timeline to fit your needs. Good luck!

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Account ClosedIf your going to market the property in the as is condition, it would be wise to mention in the marketing a great candidate for an FHA203K loan or a Fannie Mae Homestyle renovation loan. That way your selling much closer to the ARV or After Repair Value. If you can accurately determine what the place would sell for if all the work was done, then back out the estimated rehab costs and back about 5-10% more so the incoming buy has instant equity and therefor an incentive to buy using that loan style, it could net you more money.An alternative is you could refinance it using one of the above mentioned loans, get a contractor to do the work and when done, sell it as a completed rehab that is move in ready and get full market value with a much larger pool of buyers to work with. A good agent can help you determine both what its worth in the "as is condition" and what its worth based on ARV or After Repair Value. Based on those numbers, determine if its best to get the repairs done or sell as is?Your next home could be a move in ready home that is much larger and you could end up with some cash in the bank and a mortgage payment that is close to what you have now. This is good problem to have if you handle it in the correct way. I hope this helps?

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Thanks, Dave! The $20k selling price was as quoted by our realtor, who we worked with before when buying this house. Doing the math based on the 7-8% estimate, that's about right.

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Thanks, I appreciate that. Just to be clear, we have learned a lot since we bought this house and would do any necessary renos right this time (hiring appropriate people, not doing it ourselves).

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How did you come up with the $80k number? The reason I ask is that this market has been stabilizing since around May of this year and has shifted to become more of a buyer's market. Given that work still needs to be done and at this higher price (not the same price 3.5 years ago), it could be challenging. The unfortunate news as sellers - buyers have become pickier and pickier.As a rental, some of the items you mentioned would likely need to be fixed anyway. The other thing to consider - if you keep this house, would you be able to buy another house to move to and live in?Best of luck.

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This has to be one of the simplest fixer uppers I've heard of. It's a small house, and the items you listed such as paint, doors, etc. are so easy it's ridiculous. I could do most of this work myself in less than a month IF THAT. On top of that it sounds like you damaged some of the walls during your reno's after moving in. Honestly if you can't handle a simple fixer like this then I don't think fixers are for you. I would not move forward with this house anymore as far as renovations. Sell as is and buy something move in ready.

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Thank you all, that's all very helpful and gives us some clarity!

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One thing I didn't hear mentioned is HOW MUCH they put down on the house. If they put down a 3.5% down payment of say, 6K and have turned that into 80K profit after all expenses, only a fool would keep the house. I'd cash out, keep some of the money in reserves, buy another primary residence that doesn't need any work. You could technically put 15K back in the bank and put 60K down on a 300K move in ready house in Auburn with 5K closing costs and no PMI.Of course that is if your realtor (most have no clue what they are doing and have only a high school diploma, no offense to those who are top notch) is accurate about what you can get out of the house. I suspect based on your description only flippers would be interested in it, not retail buyers, as such it will sell at flipper prices, far less than you think it will.

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There are actual equations such as NPV, IRR, etc. that would make more sense to use than whether the cash from selling is greater than the cashflow. Here in Seattle the cash from selling is always going to be greater than renting it out for 5 years....I don't know how people come up with these little home made formulas that make zero sense at all.