Sell vs Rent (by DJ [VA]) Sep 9, 2021 5:42 PM|
Sell vs Rent (by Richard [MI]) Sep 9, 2021 7:42 PM
Sell vs Rent (by Jasper [OH]) Sep 9, 2021 8:45 PM
Sell vs Rent (by small potatoes [NY]) Sep 9, 2021 10:57 PM
Sell vs Rent (by Robert J [CA]) Sep 10, 2021 4:06 PM
Sell vs Rent (by Ray-N-Pa [PA]) Sep 12, 2021 8:09 PM
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Sell vs Rent (by DJ [VA]) Posted on: Sep 9, 2021 5:42 PM
As my rehab is winding down, I've been contemplating whether to sell it in this hot market, or keep it as a long-term rental as I had first planned to do.
I've had it a few years, and it's totally paid off - except now for the rehab costs.
Realtor gave me an ARV lower than I expected if it were sold, and I pretty much decided to keep it. After all, the ultimate goal is income during retirement without working every day.
Today, while working outside, I "enjoyed" (not) listening to neighbors down the street yell, curse, call someone names, etc - then play music loudly. I've also seen the local drug dealer make some sales.
The entire neighborhood/street isn't so bad, but it only takes one neighbor to cause trouble. Now I'm thinking I should re-consider selling because any good tenant that passes strict screening may not stay too long, due to the neighbors. High turnover rate is not my goal.
If I could sell for a profit - over the rehab costs - even a little, I would have more $ to (someday) buy in a nicer neighborhood, which is my goal going forward. I just hate having (much) money sitting in the bank earning pennies in interest (+ losing money) Hoping for some foreclosures to start coming on the market, and starting to put more effort into finding sellers before they get to a Realtor.
Sell vs Rent (by Richard [MI]) Posted on: Sep 9, 2021 7:42 PM
With the expiration of the govt's extra unemployment money and lifting the no eviction mandates (if they are not renewed or extended) we are going to see a bunch of broke, evicted people scrambling for places. The lower tier places, C and D levels will attract them like flies and cucarachas. These neighborhoods will have a lot more of these type people in them, either in places they lie their way into or they will double or triple up with relatives or "friends" which will further drive these neighborhoods downhill.
You mention that you can already see some problems.
I'd sell and wait for the inevitable fallout and foreclosures to come around, then start buying again, if the govt does not do something even stupider than they already have.
I'm also watching all the groups demanding "housing as a right", rent control, free housing for invaders and "refugees" from all over, etc.
I'm already looking elsewhere and moving out every marginal place or any likely to attract these problems.
Heck, I'd rather invest in timber tracts and just manage and selectively harvest trees or buy farmland or places in the country and add extra RV pads than put up with eviction moratoriums. A lot of landlords are also going to airbnb type rentals. I think the short term rentals like airbnb are going to be more the normal as opposed to the regular rentals, especially for single places. --24.180.xx.xx
Sell vs Rent (by Jasper [OH]) Posted on: Sep 9, 2021 8:45 PM
Don't ignore the potential downward slide of a neighborhood. Your concerns about attracting a good long term tenant are valid. Your house will never look better than it does after a fresh re-hab. Put it on the market with a competent realtor that knows the area. You can always rent it if it doesn't sell, but you likely will be pleasantly surprised at what you can get for it. --71.28.xx.xxx
Sell vs Rent (by small potatoes [NY]) Posted on: Sep 9, 2021 10:57 PM
DJ is this a single family? I only have multi's. They cash flow well once thy are paid off. Will the rest of your portfolio cash flow well? I'd love to sell one building that for several reasons is not my fav. But I'd ruin my cash flow. I'm not employed so all the rental income pays my expenses and now allows me to put funds away. Jasper has a good point, which way is the neighborhood trending? I have a relationship with the detectives and send them license plates and customers when I see them. I have help rid my area of 2 drug dealers. All the police need is for someone to turn on someone else. The remaining dealer is careful, but their time will come. I think my local area might have built enough new ownership to continue trending up when things drop again.
It's a matter of where you are on your journey. Can you put up with the drama and maintenance that C tenants bring? The upside to having fixed up a place is that it will require fewer service calls. The question is will it have been worth. In a year will you find yourself looking at scalded countertops and busted doors, etc..? --24.194.xxx.xxx
Sell vs Rent (by Robert J [CA]) Posted on: Sep 10, 2021 4:06 PM
Taxes! If you owned the property over 1 year, then you'd pay taxes based on Long Term Capital Gains vs Short term.
If the property was never rented out (by you) until after you fixed it up, the "costs" many have to be added to the basis and therefore you can't written off now. SO unless you aligned your tax situation with your ownership management, you may be in the WORLD OF HURT upon the sale.
A friend purchased a condo with partners and they all worked endless weekends fixing it up. Never buying materials at deep discounts. Then they finally sold it and everyone thought they were deep in profits. Between a 6% sales commission, 2% transfer taxes and escrow fees, short term federal capital gains and state tax, a partners profit went from $20,000 down to $12,000.
Sell vs Rent (by Ray-N-Pa [PA]) Posted on: Sep 12, 2021 8:09 PM
I remember learning something that hit me like a ton of bricks.
If you want to make money in real estate, don't sell like you buy and don't buy like you sell......in other words if you are a whole sale buyer, sell the place retail with a realtor. If you are buying without using the MLS, then sell it with the MLS.
I know your area well and these places are not all that bad. That said, this is a great market to sell in - take advantage of it and find a different niche to park your money in for a couple of years until the REO marketplace is investor friendly --24.101.xxx.xxx
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