Hello,
This is my first day after discovering BiggerPockets! I wish I would have found it sooner. I have a question for the community
Last year I purchased a single family home in San Diego when I was traveling back and forth for work. Now that I am 100% in Arizona, I decided to rent the San Diego property as my first rental.
I did not purchase this property with rental cash flow in mind. The difference between my mortgage payment and rent is about -750 per month. After expenses/repairs/property management fees I'm negative about 1200 each month. I was able to find reliable renters at the upper end of what is reasonable for the location and size and don't think I can increase rent. After using the calculator on this site it seems very unlikely I will be able to have it be positive cash flow without paying a significant amount of the loan off and then refinancing to get the monthly mortgage payments down.
The house was purchased as a foreclosure for 745k with 10% down. It was worth close to 900k at the top of the bubble. Its walking distance to the bay and a short bike ride to the beach. Overall I think the house will continue to appreciate and It won't be hard to find renters. Currently the rent is enough to cover the interest on the loan and some of the principle, so my equity in the home is increased.
I am trying to decide to keep this negative cash flow, but positive equity property, or to sell and use the close to 100K equity in as a downpayment for a multifamily home in town. If I hold this San Diego property long enough to have it paid off (which I could probably do in 15 years) then it would generate close to 3K a month in rental income
I'm lucky that my wife and I both have high income jobs and the 1200 dollar loss a month is less than 4% of our monthly income.
What would you all do?
