rent or sell (credit check, house, neighborhood)

[Ann77]

If it's with your sister, definitely just sell it or buy her half out anyway. Business with family is a nightmare.

[mshan242709]

Remember that there is an opportunity cost of just renting house vs. taking proceeds and investing in high quality mutual funds, paying down high interest credit card debt, or just contributing to 401k at work, at least up to company match. House will appreciate slowly over time, but if you do cash flow analysis, it may be that rent just covers basic carrying costs, don't know what expensive repairs or maintenance will be needed, so this investment may really depend upon that house price going up a lot over time.

There is no right answer, even if one option gives you more money than the other because you have to weigh if you want to be a landlord and if you really want to be in business venture with a family member.

[NJGOAT]

Originally Posted by Ann77

If it's with your sister, definitely just sell it or buy her half out anyway. Business with family is a nightmare.

Agreed. Since ownership is divided 50/50, the best thing to do is sell and split the cash down the middle. Getting into the landlord business with your sister, could result in you not speaking to your sister anymore. If rental is something either one of you want to pursue, than I think the more interested party should buy the other one out.

[fay111]

Another thing to consider if you decide to rent is do you have sufficient funds to carry the house if your renter doesn't pay, or if you are between rentals. Do you have sufficient money to pay for any repairs the house might need. You really need to crunch some numbers under different scenarios before you make a decision.

[MaverickDD]

I have seldom witnessed such a high level of agreement within this forum.
City-data friends have spoken and the concensus is clearly, 'SELL.'

[gagaliya]

I am not familiar with that area, what you need to do is search craigslist and find out how the rental market is in that area and what the rents are. If it's low rent <$1000 area then just sell it as it usually attracts the garbage tenants and you will have tons of headaches down the road.

If it's a relatively upscale suburb with a stable rental market, then i suggest you take advantage of the current historical rate and take out a 70% 30 year fixed loan or home equity on the property. Use some of that money to fix up the house and rent it out. Depends on your relationship with your sister, you can either share the rental investment with her 50/50 after expenses and invest the rest cash elsewhere, or buy her 50% outright with the cash you got from the loan.

good luck

[GiantRutgersfan]

Originally Posted by gagaliya

I am not familiar with that area, what you need to do is search craigslist and find out how the rental market is in that area and what the rents are. If it's low rent <$1000 area then just sell it as it usually attracts the garbage tenants and you will have tons of headaches down the road.

If it's a relatively upscale suburb with a stable rental market, then i suggest you take advantage of the current historical rate and take out a 70% 30 year fixed loan or home equity on the property. Use some of that money to fix up the house and rent it out. Depends on your relationship with your sister, you can either share the rental investment with her 50/50 after expenses and invest the rest cash elsewhere, or buy her 50% outright with the cash you got from the loan.

good luck

He could probably get around 1400 a month if its a 3 bedroom, close to 1800 if its a 4 BR, even if it is dated.

I would sell it though. Between the property taxes, renovations needed, and the fact that Wallington is not a town with many rentals, its probably not worth it.

[PD517]

Dump the place. You don't want to be a landlord (unless rents are higher then full costs to own). Take the cash. Do whatever with it - savings, mattress, pay down debts. Even if you earn 0% you are still ahead.

Est. 15-20 years before North & Central NJ return to 2005-2007 peak prices. Every month you hold the place you will be losing another 1%-2% of its value.

We are still in a slow deflation mode in the NY Metro market, not crash and rebound mode like other states (check my earlier posts from well over 2 years ago - predicted everything correctly). North NJ is currently at 60% above 1999 prices, well over that the earlier it was purchased. What other "normal" investment has returned even a positive percentage point since that period? Nada.


Other issues that will affect you if you decide to hold:

Government Intervention: Mortgage rates will sharply increase in the future. When big brother decides to finally pull themselves out of the free market and stop keeping the rate at near 0%, watch out. For every percentage point increase in mortgage rates, home prices drop avg. 10%.

Shadow Inventory: Thousands and thousands of properties in the nearby area already bank owned, in foreclosure or in pre-foreclosure. But RIGHT NOW, majority aren't for sale. Sitting on the banks dime, rotting away. Once the deadbeat squatters stop suing the banks since they can't pay their mortgage and the banks get the green light from the judges, the normal flow will start up again and a FLOOD of homes will be put back on the market. Increased supply = lower prices.

Taxes: Got nothing to say here. Look at West Orange. What a joke. As taxes rise, prices go down. 2% cap, haha. Trust me, the union clowns want their precious pensions, at any cost to the taxpayer, and they'll get it.

Not even going to get into future wages, inflation, etc..


Unless you got a rare, desired property (like the one in Montclair that went for over double list price), who holds a losing investment?


RP 2012. Smarten up America.

[todd72173]

Sell. Nobody enjoys being a landlord.

[chuck172]

Looks like my sister and I need to have a meeting over what to do. I now want to sell. You knowledgeable people here are very convincing. Thanks for all the good advice.