Should I Sell?

[Account Closed]

Hi. I am relatively new to BP so hello everyone. My experience with real estate investing is limited to purchasing properties using bank loans thus far - three thus far, one SF for my primary residence, and two condo rental units.

The situation I'm in is that I have a rental unit in Cape Coral FL (I reside in Denver CO). It has been rented out with no issues for the past four years. However, my previous tenant moved out and I am in the process of renting the unit again. The HOA is making this process extremely difficult and I am at my wits end with dealing with them.

They are asking for my first born child and one month's worth of rent as a deposit for the common areas. Is this normal? I'm already paying $300.00 per month for HOA dues, which obviously eats into any cash flow that I would have.

I'm thinking about selling the condo unit and reinvesting in a SF elsewhere. I purchased the unit in 2009 for $86k. The Zestimate on it is now at $118k. At it's peak, the same unit was selling for $200k.

Does anyone have any advice on this situation?

Thanks,
Bryan

[Leon D.]

Hard to say if what the HOA is asking for is normal, each one has their own quirks as far as deposits, etc. What they ALL dislike are cases like yours, absentee owners just renting out the unit. My building, for example, doesn't allow a unit to be rented for more than two out of every five years (consecutive or not).

As far as the sell/hold question, that depends primarily on two questions: 1) would the new renter be covering all or almost all of your holding costs (property taxes, HOA dues, etc), and 2) do you see area real estate appreciating over the next few years? I wouldn't put too much faith in Zillow, you'd need an on-the-ground realtor for a legitimate value.

Without knowing your particulars, all I can offer is my own opinion. I'd rent it for one more year, and over the next 6-9 months update anything amazingly out of fashion, fix anything broken, clean or paint anything dirty. Then, find a broker and list it for sale, assuming that you can clear a few bucks.

It's one thing to be hassled for a few weeks or months, it's another to not ever see an end to it. You and your money have better things to do, I'm guessing.