Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
We have a house that we lived in for about 3 years before buying our current house. We moved out of it in 2011 and have been renting it since.
Here are the numbers:
Price paid : $300,000
Current offer : $240,000
We owe : $200,000
Mortgage : $1,571 - Interest is 6.835% - We're unable to refi.
I just dumped about $8,000 into the house after the last tenant moved out. Paint, new flooring throughout, new appliances so it's pretty nice now ( good time to sell, and will only be worn out via renting )
I could rent it for $1500
It's a manufactured house, so there are some different considerations in terms of appreciation, etc.
The major reason we've considered selling it is to reduce the stress of managing multiple properties/businesses. Loosing almost $40,000 isn't really appealing. I've contacted my accountant and asked him what our tax implications would be.
Wait to hear back from your accountant but I think since you rented it out and will suffer a loss when you sell, you will be able to take some nice deductions when filing your income taxes.
Location: Formerly Pleasanton Ca, now in Marietta Ga
10,351 posts, read 8,569,440 times
Reputation: 16698
Quote:
Originally Posted by motoracer51
Could you elaborate?
I was thinking if I hang onto the house for another 4 years or so, I think I'd pay down the principle enough to get my $60,000 invested back.
The other option is sell the house, take the balance after paying off the mortgage and dump it into my investment account which is averaging 9%
Your just paying money out of your pocket to pay down the principle that comes back to you. Being the way real estate has been going, if you're still upside down now, it doesn't sound like a good market and I think a lot of real estate has peaked. In four years it might be flat or even down. You're in the hole on the mortgage and rent already. Add property taxes, insurance, maintanence, and you are in the hole every month even more falling farther and farther behind. Did you calculate that into your 4 years.
No brainer, lose more money every month or make 9% positive.
Your just paying money out of your pocket to pay down the principle that comes back to you. Being the way real estate has been going, if you're still upside down now, it doesn't sound like a good market and I think a lot of real estate has peaked. In four years it might be flat or even down. You're in the hole on the mortgage and rent already. Add property taxes, insurance, maintanence, and you are in the hole every month even more falling farther and farther behind. Did you calculate that into your 4 years.
No brainer, lose more money every month or make 9% positive.
Yes, I calculated all that - well, I used a rent vs sell calculator at "all property management . com".
Pretty thorough inputs - But I'm not sure about the tax assumption on the site. That's why I emailed my accountant.
Believe it or not, the calculator has me at ~$6K more wealth in 4 years by renting out vs selling. Obviously this doesn't take into account the future housing market to which you alluded to.
Location: Formerly Pleasanton Ca, now in Marietta Ga
10,351 posts, read 8,569,440 times
Reputation: 16698
Quote:
Originally Posted by motoracer51
Yes, I calculated all that - well, I used a rent vs sell calculator at "all property management . com".
Pretty thorough inputs - But I'm not sure about the tax assumption on the site. That's why I emailed my accountant.
Believe it or not, the calculator has me at ~$6K more wealth in 4 years by renting out vs selling. Obviously this doesn't take into account the future housing market to which you alluded to.
Did you factor in costs to fix it up to sell in 4 years?
Did you factor in costs to fix it up to sell in 4 years?
Yes. Here are my inputs. With them, the calculator is telling me I'll have $2,104 more wealth in 4 years if we sell now. Who knows what the future holds for this R/E market. I'm still waiting to hear from my accountant about my tax implications.
Calculator
Home Value info
$ 245,000
Price Paid info
$ 300,000
Original Mortgage info
$ 240,000
Mortgage Balance info
$ 200,000
Interest Rate info
% 6.385
Mortgage Payment info
$ 1,570
Taxes, Ins, Comn Charges info
$ 1,500
Monthly Rent info
$ 1,500
Appreciation Rate info
% 0
Years to Hold info
Y 4
Primary Residence? NO
(at least 2 of last 5 years) info
showHide Advanced inputs
SELL and dont look back. You got a loser. Where are you most RE mkts have come back?
Western Colorado. Our economy was/has been based heavily on oil and natural gas extractive industries.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
