What would you do with these two properties.I have rented the rooms out individually for about 7 years in one and 3 years on the other. I rented the bedrooms out individually but I think that has caused more drama but gave some pretty great returns when filled with good tenants. However, it seems it's been more difficult to find good tenants the last 1.5 years with a vacancy rate of around 40%. Any advice, strategies, or suggestions would be greatly appreciated. Thanks!

First Property

3000 Sq ft

5 bed

3.5 baths

Purchased 220k

Loan remaining 200k

Worth 310k

Mortgage 1400/month

Rev when full 2900/month

Profit 1500/month

Property 2

1600 Sq ft

5 bed

2 bath

Purchased 90k

Loan remaining 78k

Worth 140k

Mortgage 700/month

Rev when full 1700/month

Profit 1000/month

Drama and difficult to rent with a 40% vacancy in my area would mean sell.

Looks like you could make some great profits.

Can you take that money and find another investment that would bring excellent returns without the drama and vacancy?

I don't know where you are in VA, but my daughter lives in DC (in the District) and I know that housing is not so abundant there. I don't know what makes your neighborhood to have 40% vacancy rate.

You give lots of details about the properties as if you were going to sell them, nut not enough about them as rentals. You give profit figures, but without useful property figures, including vacancy rate (in terms of time rented). For property 1, is that $1500 month WHEN FULLY RENTED? What is realistic figures for monthly profit over last year?; expected profit over coming year?

Do you need the income? Do you have other funds to live on?

What made you decide against selling it? December/January isn't the best time to sell it... we're just now getting into good house-selling time. On the flip side, this is also good house-renting time as well.

---

"Hello, I was wondering if I should sell one or both of my properties, not sell them at all, take out the equity, save the money and declare bankruptcy factoring in rising interest rates, its becoming more of a buyers market soon, stress and expenses of being a LL, appreciation, I haven't found another job yet, and just basically all the pros and cons of being a LL vs working a 9 to 5. I rented out the bedrooms individually in both of my residential homes for better vacancy buffer and more profit. I lived off the rental profits for a little over 2 years after my 60k job was terminated when the company closed."

"However, recently in September 2018 I had both homes go totally empty, father was diagnosed with cancer in prostate hip and spine, aunt getting cancer in her neck, threatening to get sued by evicted tenant, both homes needing lots of repairs, girlfriend of 3 years ending the relationship, getting hospitalized, mother getting hospitalized for chest pains, and losing almost all my life savings since then paying the mortgages and trying to fix them up."

"'m thinking about selling my rental property since I cannot rent out all 6 bedrooms any longer according to the city codes. With only 4 bedrooms to rent out, I would only be able to make about $200 profit a month."

Did you end up finding a job and using your paycheck to help bridge the gaps in your expenses?

Did your family's health issues end up getting resolved okay?

Did you evicted tenant calm down and disappear?

Did you get your repairs taken care of, and both houses are at least clean/safe/functional?

Did your personal life end up smoothing out?

Have you started getting your cash cushion replenished?

Are you now able to handle the $1400/mo mortgage plus $400/mo utilities with your current occupancy?

I'm afraid you are thinking you have more profit than you really do. In addition to mortgage payment, you need to calculate vacancy rate, turn-over costs, taxes, insurance, repairs, maintenance, utilities, ..........You now understand the city regulations, and can't have as many roomers as you used to.

Can you figure out WHY it's been more difficult to find good tenants? Have you changed your qualification standards or you advertising methods? Do they pass your qualification, but not cooperate later? Has a major employer left the area? Figuring out WHAT the problem is is the first step to fixing it.

James,

Each time I consider renting rooms in a large house I calculate that renting to a single family is MORE profitable when I consider vacancy, more apps, more screening, showings, MY time, hassle factor, utilities, lawncare, common area cleaning, maintenance, drama...

I rent it, add animal rent and appliance fees, extra income via PayDayRent then take Wifey to dinner. Done.

PS

Based on your 40% vacancy your $2900 house is only bringing in $1740.

$1740 Income

-$1400 Mrtg

-taxes

-ins

-maint

-utils

...I hope I'm wrong but I'm guessing you are actually losing money on this rooming house method.

If in your area you are having 40 percent vacancy...in this economy, what happens when we go into our next recession?