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Old 06-18-2013, 03:25 PM
 
35 posts, read 32,313 times
Reputation: 24

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I would appreciate opinions on whether to lease or sell my RR home this summer. Details on the home:
4Bed/3Bath/2900 sq ft
In Old Town Elementary/Walsh Middle/RR High school zone
Bought for $260K in 2005
Mortgate + Insurance + Tax is about $1,500/mo

I am looking at either leasing for $1800 - $1900 or selling for $285-290K
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Old 06-18-2013, 03:28 PM
 
Location: central Austin
7,234 posts, read 14,031,298 times
Reputation: 3892
sell
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Old 06-18-2013, 03:40 PM
 
Location: Austin
251 posts, read 338,434 times
Reputation: 174
I can't think of a better time to sell.
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Old 06-18-2013, 03:49 PM
 
2,633 posts, read 5,822,956 times
Reputation: 2873
Hands down sell. $4k/yr potential profit, versus a $40k shot that even conservatively invested will earn more over the next 10?
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Old 06-18-2013, 03:50 PM
 
Location: Austin
7,205 posts, read 19,339,875 times
Reputation: 9818
We are so low on inventory right now, that selling would probably be the best/better option!!
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Old 06-18-2013, 04:11 PM
 
Location: The People's Republic of Austin
5,184 posts, read 6,128,469 times
Reputation: 2559
After you pay the realtor's fees and seller's closing costs, you will walk away with a net gain of $9500.

If, and it is a huge if, you can live with the hassles of being a landlord, even with a rental agent, you will cash flow about $200/month. Before repairs, etc. - all of which are deductible. Over ten years, Austin residential RE has averaged about 4%/yr appreciation. So in ten years, you should be able to sell for between $400 and $450K.

If anyone has a way to invest $9500 and make $100K in ten years, share it with me.

If you are temperamentally capable of bring a landlord, and you know you will not - under any circumstances - need to touch the cash for ten years, I'd rent it.
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Old 06-18-2013, 04:19 PM
 
7,180 posts, read 12,643,912 times
Reputation: 3755
Quote:
Originally Posted by vrr106 View Post
I would appreciate opinions on whether to lease or sell my RR home this summer. Details on the home:
4Bed/3Bath/2900 sq ft
In Old Town Elementary/Walsh Middle/RR High school zone
Bought for $260K in 2005
Mortgate + Insurance + Tax is about $1,500/mo

I am looking at either leasing for $1800 - $1900 or selling for $285-290K
sell
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Old 06-18-2013, 04:22 PM
 
35 posts, read 32,313 times
Reputation: 24
Quote:
Originally Posted by scm53 View Post
After you pay the realtor's fees and seller's closing costs, you will walk away with a net gain of $9500.

If, and it is a huge if, you can live with the hassles of being a landlord, even with a rental agent, you will cash flow about $200/month. Before repairs, etc. - all of which are deductible. Over ten years, Austin residential RE has averaged about 4%/yr appreciation. So in ten years, you should be able to sell for between $400 and $450K.

If anyone has a way to invest $9500 and make $100K in ten years, share it with me.

If you are temperamentally capable of bring a landlord, and you know you will not - under any circumstances - need to touch the cash for ten years, I'd rent it.
Interesting take, scm53. Only thing I'd say is I might look at taking around $80K in equity and invested over 10 years that might yield about a $50k return, plus I'd be looking at closer to a $75K gain in 10 years on home value after realtor fees etc. But I'm not sure about my landlord temperament, that will be a new experience for me
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Old 06-18-2013, 04:34 PM
 
7,180 posts, read 12,643,912 times
Reputation: 3755
Quote:
Originally Posted by scm53 View Post
After you pay the realtor's fees and seller's closing costs, you will walk away with a net gain of $9500.

If, and it is a huge if, you can live with the hassles of being a landlord, even with a rental agent, you will cash flow about $200/month. Before repairs, etc. - all of which are deductible. Over ten years, Austin residential RE has averaged about 4%/yr appreciation. So in ten years, you should be able to sell for between $400 and $450K.

If anyone has a way to invest $9500 and make $100K in ten years, share it with me.

If you are temperamentally capable of bring a landlord, and you know you will not - under any circumstances - need to touch the cash for ten years, I'd rent it.
maintenance alone is 1-3% of the house value which will destroy any profit and eat into gains. Also Round rock is not austin and is heavily dependent on dell.


Austins 10 year appreciation is around 3.25%, round rock is 2.75

Take into account

1) taxes on the sale (since it isnt a primary residence), you take a 35% haircut for ordinary income
2) Leverage, the only reason the owner makes so much relative to the investment is because of leverage of an original investment. You have to consider the impact of investing the original equity, not just the profit.
3) maintenance almost completely eats away at any appreciation based profit.
4) liquidity - houses are very illiquid.

Last edited by Debsi; 06-18-2013 at 09:30 PM.. Reason: Sorry, no real estate links allowed per TOS
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Old 06-18-2013, 05:26 PM
 
Location: central Austin
7,234 posts, read 14,031,298 times
Reputation: 3892
This ^^^^
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