Hello All,
I am seeking advice on whether to sell a rental condo or not. The condo is located outside Charleston, SC in a sought after area with a great school district and has always rented quickly. I purchased this condo back in 2006 and it was my primary residence for almost five years. I paid $200,000 and when the economy tanked this property was well under water. The current value of this property is approximately $165,000 (still much lower than I paid for it) and I owe $158,000 still on the mortgage.
The one saving grace is that I had an interest-only ARM mortgage that adjusted beginning in 2013 to a much lower rate and adjusts annually now. My current mortgage payment + HOA payment is $850 per month and the property rents for $1200 - $1300 per month so I currently have a positive cash flow of approx. $450 per month but know this amount will be reduced each year as interest rates rise.
So why am I thinking of selling now? The condo HOA is talking about potential special assessments that may be coming up later this year and also next year of approximately $5000 each time or $10,000 total. These are guesses by the HOA at this point as they do not have real numbers or even timeframes as of now and are speculating but these assessments will cover new windows, patio doors, and siding - items that do not really add to property value.
I really do not want to come out of pocket anymore on this property as it will take almost 2 years of rent to recoup these proposed assessments. Also, I manage renting this property from over 4 hours away and it is becoming more and more difficult and I do not enjoy being a landlord and dealing with tenants and repair issues. I have also had to deal with neighbor issues from afar with the neighbor above flooding and ruining my ceiling two times in 5 years and a potential lawsuit against this neighbor so needless to say this property has brought me little joy.
Is it crazy to sell a positive cash flow property in this situation? My reasoning was if I can sell now and pay off the current mortgage balance without out-of-pocket expenses or being on the hook for these potential future assessments that it may be worth it to walk away from this condo now but wanted to hear other's opinions on this. Or should I just hold on and keep dealing with the condo from afar but knowing that it may take quite a few years (if ever) to recoup the new $10K potential assessments + $35,000 in property value that it is still under water from what I paid for it?
Sorry for the lengthy post and I appreciate any and all advice from this community.
Aimee
