Hello everyone,
I own a studio condo in a 14 unit building in St. Louis. A little background: I bought this property in 2008 in my 20s just before the crash, thinking you can't go wrong buying instead of renting. I paid $172,000, slightly more than the original owner paid a few years prior.
Fast-forward to now, the property is not back to pre-crash price levels. Zestimate (FWIW) is around $150,000, and taxes on studio units in the building are also based on $150,000 appraisals.
The property is located in Soulard, St. Louis, MO, a historical and entertainment district. The neighborhood has rebounded well and demand is high, but condos are lagging behind on sale price. It is extremely easy to rent. When vacant, it lasts maybe 2 weeks, and most tenants stay for multiple years.
Between the mortgage, insurance, HOA dues, taxes, etc., I break even almost to the dollar. There is a little room to raise the rent, but we'd be talking just a few hundred dollars per year. Our HOA dues are also very low, so every few years there is a major repair that requires a cash call.
The property was refinanced under HARP in 2012 at 4.5% and I have around $115,000 remaining on the loan.
The HVAC and other appliances are all from 2005. So there are likely some upcoming expenses there.
I have been intending to hold this property for the foreseeable future, but I'm no expert. What would you do?
A little asterisk on this question: I am considering investing in a vacation rental, and could possibly use the equity built up in this property (if it appraises high enough). I'm in the very early stages of researching this, though.
I'm interested to hear what those with more experience would do in this situation. Any insight is appreciated!
Thanks,
Tim
