Hello all. I was just logging in to check posts and stumbled across an old post that I made a few years back. You can find it here:
https://www.biggerpockets.com/forums/52/topics/702124-first-...
Well things have changed since this post, the biggest being covid and what it did to real estate prices. I still live in this house. Since this last post, I started two businesses and have been somewhat successful with both. Both businesses are based out of Montana. One business I have a partner with and she just located to New York. Our plan is to grow that business on both coast separately. My other business has been running three years and we are at a point where we are going to go on tour so I will be gone the majority of this year.
Which brings me to my little old house. As stated in my previous post, I purchased this house in 2017 at 218K. It is a 2000 sq foot 4bd 2ba town house with a small front and back yard. When I first purchased the house, I financed it at 4.25 percent I believe. I refinanced it once and brought the rate down to 3.5 and then another time and brought the rate down to where it currently sits at 2.75%. I have paid the principal down to about 179k. The house has over doubled in value and the prices in this area remain strong. The house is now worth 489k.
In January, we had a cold snap come through and I was out of town. It busted pipes and for a couple days, water ran before someone got it turned off. The basement was a total loss and the main floor of the house took a lot of damage as well. The remediation company came out and just today removed the rest of their equipment. Insurance is going to rebuild the house. So basically, moving forward, I have a new house.
Since I am leaving on tour, I have a few options. As stated in the previous post, this is a college town, so I could rent out rooms, keep the basement for myself and come and go as I please whenever I am in Montana. Both businesses are based here, so I have to be in town here and there. That would leave three bedrooms to rent out. Two I could rent out for 600 each per month and one I could get 700.
Another option would be to rent the house out to a family through a property management company and just let it cash flow. Comparable rentals in my location fetch about 2800 per month. Property management company takes a flat rate fee of 225/month. The company I am considering has a default rate of less than one percent. My house is in a starter community with young families and in an area they are beginning to develop. I expect values to continue to rise.
The last option would be to sell the house and collect my equity. I could exit this house with a lot of money and everything paid off. This would be nice but I would loose the property, the low interest rate, the buy in to this community and, most of all, the tie to the house. It was my first property and I haven't bought a property since because I put my money into the businesses. I plan on investing in the next two to three years when things level out with the businesses but for now, I dont have the time.
I am just looking for some advice or maybe some different points of view before I make a major decision. This forum has been great for me as a long time lurker over the years and I know I will find a nugget of wisdom from all of you that will help inform my decision. Thank you all in advance!
