All Forum Posts by: G.W. Weber

Thank you, @Jerry W. for the great insights! We're located near Asheville, NC. Weather gets cold enough to freeze pipes once or twice a winter, and they are taped. Being my home for the past 14 years, it's in pretty good shape for its age.

I especially appreciate your points on inflation. That's a great point about the payments staying the same even though money is losing value.

Thanks for the response. It won't be hard to rent, despite the rural setting. Our area has had a housing shortage for a very long time, and the current market has brought it to a fever pitch. Even when the market dies back down, I don't foresee a problem renting the home between $1300 and $1500/month.

I don't personally own any STR's yet (I just manage them), although that is along the lines of one of my questions to myself: what would I invest the cash-out in that would be equal to or greater than keeping it as a rental? I'm not sure I have that answer yet, but am open to ideas.

I appreciate the question "what excites you." I've spent a couple of years researching and planning to make the leap into real estate investing. I've come close a couple of times before, but never felt comfortable enough to pull the trigger. Keeping this as a rental could very well be the jumping off point I need to get my feet wet in the rental-ownership process. Once I actually own a rental and see the cash flow, I envision myself feeling more comfortable with purchasing the next deal.

I'm wondering if there's an aspect I'm not seeing with it being a doublewide and depreciating versus an opportunity to cash out and buy in elsewhere. If this home were stick-built, there's no doubt I would keep it and let it continue to appreciate while also cash flowing.

Thanks for weighing in and the thought-provoking question!
 

I'm in a good position right now, and am unsure which is the "best" decision. I'd love any insights! 

I've been watching the market and preparing to jump into purchasing my first rental unit. Recently, I had an opportunity come up for my primary residence that took me out of my home of 14 years and put me into a new home about 1.5 hours away. I'm moved now, and trying to figure out what to do with my old property. I had always expected I'd keep it as a rental, but the market in our area is red hot (along with everywhere else) and I have a chance to sell it for well above what it would normally be worth. Being that it's a 1995 doublewide, I know that it has a limited shelf life and is depreciating every year. I'm wondering if I should cash out at the top of the market while I can and invest that money elsewhere, or keep it as a rental as originally planned.

Here are specifics:

1995 doublewide, 1680 sq ft, good floor plan and in good condition with upgrades/additions (metal roof, brand new heat pump system, large covered front porch, just took care of all arborist work needed). Bought it for $128.5K 14 years ago. Refi'd about 5 years ago on an IRRRL and pay $650/month. My balance is $75K. Well/septic. Only utility is electricity, $15/month in trash pickup.

I can sell it for ~$205K today, and would walk away with close to $110K in cash after the deal. I could use that $110K to invest elsewhere (likely after the market comes back down), and hopefully into duplexes or stickbuilt homes that would appreciate. Inflation is a real concern for me, and waiting until the next good opportunity to buy real estate could cost me a good bit of that money. I'd need somewhere to park that money safely until then.

If I kept it as a rental, I would need to use a rental manager. I have a long-standing PM in town offering 8% with 1/2 of first months rent and a $200 lease renewal. For $150/year they'll do 4 quarterly walkthroughs. They are anticipating ~$1500/month in rent, possibly up to $1800/month for the first lease or two due to a critical shortage in our area currently. That won't last forever though.

The home is in a rural area off a long, poorly maintained dirt road, but borders a creek and a farm across the creek. Only 1 visible neighbor. The drive to the house on the dirt road is very junk-yardy, being an unzoned area. It is very quiet though, and only 15 minutes to a popular tourist city. The area is developing towards this home, and they're currently widening the main access road from 2 lanes to 4 lanes.

I run vacation rentals professionally in this market, and am not interested in turning this home into a STR at this time. The cost of furnishing and getting it to "guest ready" would take me a long time to recoup, and being a doublewide the rents would be lower. I can't manage the home myself (don't have the time) so I'm relying on someone else to run it for me. No local STR managers will take a doublewide anyways. I'm pretty comfortable with LTR or selling.

Am I foolish for being on the fence on this one? Is the clear winner to still keep it as a rental, or to cash out and use that money elsewhere? The land alone is worth $50K-$60K today, and in 30 more years the doublewide would be end of useful life, but the land might be worth $100K. Or, in 5 years, I could find the home's value dropping back to $175K depending on the market or the added age of the trailer.

Like I said, it's a good place to be! What would you do in my shoes?

Thank you in advance!