All Forum Posts by: Nick Sutton

Well after some in depth discussions and the input from this thread I think the answer is that I keep it just for the shear fact that there is no money to be gained right now. Basically the house is self sufficient and to be smart about it, I could just start saving a $100-$200 a month toward the property for big ticket items that may need to be repaired in the future.

Thanks for all of the input. Looks like I am going to hang on to the property for now and re-evaluate in a few years to see where the property stands.

I have State Farm and the policy type is "Rental Dwelling". Maybe I should have stated that instead of "homeowners insurance". I was just going off the statement from Chase. I looked at the policy as well to make sure there were no money saving options there either.

The rent was increased from $1400 to $1450 this past renewal. I would say it's in-line with the surrounding area as well.

Mortgage interest paid
(year) - (interest paid) - (outstanding mortgage principal)
2019 - $7,233.55 (175,077.22)
2018 - 6,891.92 (180,120.01)
2017 - 7,081.24 (184,835.33)
Current principal balance (169,041.00)

I'm not really sure why 2019 interest spiked +$341.55 but that is something I am going to look in to because that shouldn't be the case.

I get what you're saying and that is why I am wondering if refinancing might be the best option for this property. Obviously there is no equity to be had but it would considerably reduce the mortgage therfore at least giving me cash flow now. I definitely think it would be smart if I could avoid PMI but then I am tying up $33k which could easily be used for a better property.

Here is my 2019 statement details: 

I paid $1,760.12 in mortgage insurance in 2019 so that's an additional amount I'm not paying in 2020 since it's gone.

2019 Taxes paid were $2,016.66 which which according to the assessment will remain the same.

HOA is staying at $95/mo

Homeowners insurance shows $558/yr

Currently there is no PMI on the property. That's the only reason it's really even close to breaking even honestly. It used to and then this year it finally went away and now it's "cash flowing" lol.

The assessment listed is the city assessment. 2019 & 2020 remain the same at $165,300 so it's not increasing per the city. 2018 was the worst at $160,700 and then 2014-2017 it was $164,300. I know that has nothing to really do with a bank appraisal but I know people look at it and make assumptions based on those numbers. Plus, comparing to what properties in that neighborhood have sold for, it's not really far off from what I think the house could actually sell for.

I think the rent on the property is most likely at its max level. I have a hard time thinking it will keep increasing. The area (imo) is somewhat declining as the city is more focused on other areas. 

The one big perk we have is this is a military area. BAH for an E01 with dependents is $1,599 and $1,224 w/o. I think that definitely plays a huge role in the that rental market pricing and being a 3bd 2.5ba it should be able to always keep someone in the property.

I'm definitely on the fence and I appreciate your feedback.

 I agree that I should be ignoring the assessments, its just hard to not pay attention to them.  

Currently for sale in the neighborhood is a FSBO 3bd 3ba 1,475 sqft house listed at $165,000.

Sold Units:
3bd 2.5ba 1,452 sqft - waterfront - $196,000 - Dec 30th, 2019
3bd 2.5ba 1,745 sqft - $164,200 (most similar to my unit) - December 20th, 2019
2bd 2.5ba 1,467 sqft - $164,00 - December 3rd, 2019

My unit's old listing somehow still pops up.

I'm having a realtor friend pull official comps for me but I verified all sold that popped up on Trulia against the cities property information site. All values were accurate.

I dont see why I couldnt list the house for $182-$185 and see what happens. Then if anything maybe fork out a few thousand out of pocket to get rid of it.

In April 2012 I purchased a 3bd/2.5bth 1800 sq ft. townhouse house from my ex-wife that we bought together quite a few years before. Not really understanding rental properties I thought I was doing the right thing and taking advantage of an opportunity to own rental property. Needless to say that didn't pan out how I had hoped.

My purchase price was $206,012 in a 30 year mortgage at a fixed 3.875% rate. I currently owe $169,041 on the property and the mortgage is $1,194.90 and I am capturing $1450.00 in rent. I have a property mananger @ 10% fee so my take home is $1,305. To add to the damage, this home is located in a subdivision with a $95 HOA fee. My net gain from this property is $16/mo.

In the 8 years of ownership, I have only had 3 months of the property being vacant and two of those months were when I first purchased the house. It's been a strong rental in the sense of occupancy.

Repairs on the house have been mostly minor. I replaced the HVAC in 2012, water heater in 2010. When I lived in the property, I updated the kitchen with nice appliances, ceramic tile flooring and also renovated the flooring in the master bath as well as update a spare bath.

I know the property will need a new roof within the next few years and I am sure there are other items that will be coming up at some point such as the water heater again and possibly the HVAC again.

The downside to this property is that this area of our city took a pretty significant hit in 2013-2015 with city assessments and the property assessment went from $213,100 (2013) to $164,300 (2014). It's currently assessed at $165,300. I would assume the house would appraise for $160's to mid-170's when comparing to surrounding properties that have sold. Basically I am dead even on what I owe and what it's worth.

Is this property worth hanging on to since it's fairly "cheap" and refinance the current loan amount or should I just part ways and take my loss to get it out of my portfolio.

Does refinancing make sense even if I have to get back in to PMI? If I refinance the property, pay PMI & Property Management and the rental income staying at $1450/mo that should make this property cash flow approximately $200-$300/mo

I'm just really stuck on what the right decision is for this property and I really want to do my best to "correct" my dumb move back in 2012.