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Well, I guess I've gotten myself into a pickle. I chose a very bad real estate agent the first time around, and my house was priced too high. Switched agents, but by then it was too late and now it's been sitting on the market for 4 months and there are no longer any showings.
So I called a property manager and she put the house up for rent. She is currently screening interested tenants and there are several. The rent will just about cover the mortgage, but not including the management fee, unless we refinance, which I'm not sure is even an option? We have a 15 year loan with 12 years left on it and are at about 70% loan to value right now. But I'm not sure if our value is inflated since it never sold for that amount?
I just can't stand any more heartaches/headaches and everything else. My family and I just want to move on and be able to get out of the small apartment we are currently living in, it's driving us crazy!
Any advice? Am I doing the wrong thing? Will I be able to refinance after it's rented to improve cash flow, or should I keep it on the 15 year loan since I'm putting $800+ toward equity every month, so I am going the right direction anyway?
Last edited by catlovr8; 08-17-2014 at 09:41 AM..
Reason: grammar
Throughout the United States, operating expenses run 45% to 50% of the gross rents. The first thing you need to understand is you will lose money. So if the rent is 1k you will lose about 450-500 dollars a month over time. "I just can't stand any more heartaches/headaches and everything else" not what a person that became a landlord by default should be saying.
don't you think I realize that?? I am kind of out of options. House won't sell. What am I supposed to do with it, let it stand vacant forever? Rather at least have someone in there.
don't you think I realize that?? I am kind of out of options. House won't sell. What am I supposed to do with it, let it stand vacant forever? Rather at least have someone in there.
I'd be getting a new agent (maybe) and setting a new price. Make it look PERFECT. Put the furniture back into the house. Get the house sold. Becoming a landlord under these circumstances is the WORST option, both emotionally and financially.
Edited to add: I thought I remembered that you had at least one offer on this house, and I was correct. Maybe go back to those buyers? offer asking for ALL of our furniture
Or maybe move back into the house until it does sell, then move? Yes, I know there's a new job that's an hour away, but maybe rent a room for cheap in somebodies house near the job, or put up with the commute for awhile?
I would be interested in speaking with you about the options you have. Are you currently behind on any payments? If so what are you monthly payments? Its a way for you to in move back in the home and keep it if thast what you really want to do. Its ok thats if its underwater, there's still several options.
Renting right now is not a wise option. Refinancing is likely not necessary. If you want to sell your house, then sell it. Renting it is not the way to do it. You would be stuck trying to show a home with tenants in it, dealing with the wear and tear on a home from tenants and trying to sell subject to a lease.
You need to sit down with a real estate agent and have another, current market analysis done. Then cancel or withdraw the current listing. Move back into the house with minimal furniture. ( keep pix, knick, knacks, etc. in storage).
Have new photos taken and relist the home at a new price with those new photos. Deal with the hour's commute. Where I live an hour's commute is not at all unusual. If you really think it's too far, have who ever has to do that commute, rent a room and go home on weekends until the house sells and closes.
Seriously, if you want to sell, then do what is necessary to get the house sold. Try not to go off on tangents which only confuses the issue and doesn't get the house sold. A properly priced home in good
condition will sell. When something doesn't sell, then figure out why and do what you can to correct it.
Good luck
don't you think I realize that?? I am kind of out of options. House won't sell. What am I supposed to do with it, let it stand vacant forever? Rather at least have someone in there.
If there were many showing, the agent did their job, if you want offers you need to drop your price.
The house will sell but not at the price you want. You either sell for market value or wait for the market to come up to your value.
After you list your house, it will be difficult but not impossible to refinance it immediately after withdrawing it from the MLS.
You are on a 12 year loan, to increase cash flow so you aren't so negative, go to a 30. So much more money goes towards principal on the 15 year loan. All you are doing is giving the money back to the bank to get it back when you eventually sell the house which you really want to do. The cost of your money is just the interest rate which is probably close to 4.75 now if you refinance.
Your value is based on what has recently sold not what you think it would have sold for. If you are basing the 70% LTV on your list price, it is wrong and probably wont appraise for that.
Either hold the property for a while and make a few hundred a month or sell it now for a few thousands in losses. It really depends on your income and what you can absorb.
Either hold the property for a while and make a few hundred a month or sell it now for a few thousands in losses. It really depends on your income and what you can absorb.
Or hold the property for awhile and rent it and have thousands of dollars in losses when they trash the place.
You blame the lack of a sale on the agent and that she priced it too high. I believe the agent was trying to do a good job for you by trying to get you the best price for the house. What she did was much better than pricing it at a giveaway price so that it would be an easy sale and commission for her, but not the best price for you.
I don't think that 4 months is enough time. I would go with Jkgourmet's advice above.
If you do rent it and want to minimize headaches, use a property manager. yes, they will take a cut, but if the property manager is any good it will be well worth it.
If you decide to rent it, it will be very hard to refinance in today's mortgage market conditions. I would be happy with the 15 year mortgage which allows you to put a lot of money towards equity each month.
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