All Forum Posts by: Alexander Babbie

@Julie Marquez Small world isn't it?  I was considering being a landlord for the experience, as it's not like I have a ton of equity locked up in this house yet, but there are some sizable risks (especially with the pool) that do make me a bit wary.

The biggest employer I was talking about coming in is Norsk Titanium.  They have already started work on a multi-billion dollar plant in Plattsburgh, where they will use advanced industrial 3D printing technology to essentially print titanium parts for the aviation industry.

Its a high-paying, high technology employer and when they are at full capacity it will be the biggest employer in the county with the exception of the hospital.  Pretty exciting stuff.  Since they will be bringing a lot of engineers and specialists from outside the area, it is a pretty good time to have a move-in ready nice home on the market, as it seems they are going pretty fast.

https://www.northcountrypublicradio.org/news/story/34886/20171018/cuomo-visits-norsk-titanium-in-plattsburgh

Thanks all for the feedback.  I am def leaning on just selling it while our market stays hot and taking it as a life lesson.

I guess I can take some comfort in I'm certainly not the first to unexpectedly be put in the position to sell a house due to relocation.  At least it's due to a positive job opportunity and not a job loss.

I realize this is a loaded question with a million variables, but is there a general consensus on how much "flow" a SFR needs vs holding costs to make it worthwhile?

Darrell,

Thanks for the reply.  With my numbers, yes if I sell, realistically a good outcome would be for me to break even when true cost basis is factored in.

That's certainly not ideal, but neither is my situation.  I wouldn't be upset if the numbers made it so it was like i never bought this place to begin with.  That would allow me and my wife to simply move on to a location that works better for us.

My total mortgage payment is $1500 a month, which includes all taxes and insurance.  Realtors and local property management companies are saying I should be able to rent out my house for $1600-$1800 quite easily.  After property management is factored in that too becomes a wash, on top of vacancy and capex issues.

It's not an ideal situation for sure, just not sure what the best move would be.

Hello all,

My wife and I bought a house in Plattsburgh, NY about two years ago.  The house is a 2400 sq foot, 3 bed, 3 bath, big pool and hot tub.  Since we bought the house, I have put about $15,000 into it, as I have completely remodeled one of the bathrooms and completely rebuilt the back deck, which wraps around the pool.  I have also painted the house top to bottom, including painting the trim white, which was that orange pine 90s look before.  Suffice it to say, the house looks amazing and brand new throughout.

Now, I work in Burlington, Vermont which is about an hour away and involves a 20 minute ferry trip across Lake Champlain.  We bought in Plattsburgh because that's where my wife worked and the home prices are *drastically* more affordable than they are anywhere in Vermont.  My dilemma is my wife unexpectedly landed a much higher paying job in Burlington recently, which has left me unsure what to do with my current house.

Both of us commuting and spending hundreds each month in ferry / travel costs on top of the time commitment is silly.  So the question becomes do I sell or rent this place out?  I have an amazingly low 3.2% fixed mortgage on the house, and according to most realtors I should be able to rent it out for ~$100-200 more than my total mortgage payment.  Plattsburgh doesn't have a large single family home rental stock, and we have a few big employers coming in, so the house *could* be a nice long term hold.

However, due to those employers coming in this year, those same realtors have told me that this area has been quite the sellers market and if I listed it I should be able to sell it for $20,000-$25,000 more than a bought it for, which isn't bad for only owning it for 2 years.  On a negative, the roof has only 2-3 years left, which would cost me $6,000 or so if I did most of the work myself (luckily I'm fairly handy).

What to do?  Do I turn this home into a long term rental and be an "accidental landlord" banking on the lack of single family homes for rent in my area, coupled with the new employers coming in and the central, convenient location of the house?  This of course involves risk to a certain degree, but then again so does all real estate.  Or do I sell it when the market's hot and not have to worry about a potential downturn later on?

In either scenario, my wife and I would rent in Vermont for 1-2 years minimum, as we want to ensure we don't run into this problem again if we can avoid it.

I'm a complete real estate noob, so any advice on strategy and timing regarding this situation would be greatly appreciated.

Cheers..

-Alex

Brian/Jack,

Thanks for the replies.  Brian, I agree the rent is currently to low (I am in the city of Plattsburgh), I have had two different property managers believe my house could fetch $1600-1800.  I believe over a couple of years I will be able to get my current tenants at least to the $1500 mark.

Jack, that is my dilemma....I have a tremendous tenant that is paying off the vast majority of my mortgage, I am hesitant forcing them out if they can't go any higher, only to find myself with a crap tenant down the road (to me the additional headaches of a bad tenant aren't worth 200 a month).

As far as CAP EX goes, the only big expenditure on the horizon is the roof, which has 2-3 years left on it. However, I think I'd have to replace it for it to sell anyways, so its already a cost factored in whether I continue to rent it out or sell it. Luckily my friends and I are rather handy so I won't be paying much in labor costs for it.

One thing about my market is there are very few single family homes for rent and our area has had an influx of manufacturers and high tech companies moving in during the last couple of years.  Having one of the few very nice homes available for rent during a boom time seems to be playing in my favor.  Only part of my strategy I'm unsure of is how to deal with an awesome tenant who treats your house like gold who simply cannot afford to go as high as the market will allow.

Hello all,

I find myself here as an "accidental landlord" who needs some advice from those with more experience than I.

Anyways, my wife and I purchased a house in upstate NY last year...and it has been a nightmare ever since.  I am a country boy and was totally unprepared for how much I would hate hearing city traffic.  It literally ruined the experience with the house, which is unfortunate because other than being on a relatively busy city road it does have a lot to offer (gorgeous kitchen, finished basement, cedar wrapped indoor pool, 6-person hot tub).  Not to mention how embarrassing it was not to realize what an issue it would be for me prior to closing.

Anyways, 6-months later my wife got a tremendous job offer about an hour away from this house, which was fortunate because I too had worked about an hour away, and with her now working in the same area I do, we hurriedly put our house up for rent.  We literally went with the first applicants that had their ducks all in a row, as we wanted out of the house as soon as possible. 

So far, 6-months later my tenants have been amazing.  They are very low-key, pay the rent on time every month, and keep my house in immaculate condition.  On top of that, they *LOVE* the house and its convenient location and are looking to rent very long term (They have two middle-school aged kids and having them in my school district is paramount to them).  The problem is the agreed upon rent ($1300) is causing a negative cash flow of about $200, as my total mortgage payment w/ escrow is about $1500.  I know that the $1300 is at the very high end of what my tenants want to pay, so I am hesitant on my strategy when the lease expires.  I honestly don't mind losing $200 a month just to be free of the place, especially considering my tenants have been amazing.

As far as the numbers look, my house is appraised at $230,000 and I owe $205,000.  The market I am in has been very stable for a very long time...no incredible appreciations or depreciations of value (even through the housing crash of 2008).

I realize selling it any time soon would be foolhardy, as I just bought the place within the past year.  I honestly wish I never bought the place, but am doing the best with the situation as it is.  Anyways, what would be a decent strategy going forward?

Thanks!