Contemplating whether to rent or sell a home in Northern VA

[mdcrim]

How long have you been there (all 15 yrs)? Do you have a lot of equity? You may need to refinance from a primary residence mortgage to an investment home mortgage. Since you're planning on staying in the area (saw you are moving over to Brambleton), I'd keep it and rent it out. Get a home warranty to cover major systems (about $500 per year plus deductible). Ashburn residences normally rent quickly and have generally decent tenants, as long as you screen them well. Since it's a townhouse, renovations are much cheaper than SFH's. If you can get a decent tenant, there really is no problem with being a landlord and it can be a pretty easy gig. You just have to make sure you have a backup if you go out of town. I've been a landord for over six years. Had some challenges but nothing too bad.

[accufitgolf]

If I can easily check on my property and I have a cast in concrete rental agreement and I have a hard a$$ management company to manage it for me and I am located in a prime rental area, and I could afford the place being vacant for say 6 months, then I might consider renting it out.

Unless all of the above align, I say sell it and move on to the new place.

If we think it is a buyers market and they are being hard, read the Renting section posts in this forum and see how renters are trying to beat things....they often feel more entitled then buyers....LOL

[vauser]

Originally Posted by mdcrim

How long have you been there (all 15 yrs)? Do you have a lot of equity? You may need to refinance from a primary residence mortgage to an investment home mortgage. Since you're planning on staying in the area (saw you are moving over to Brambleton), I'd keep it and rent it out. Get a home warranty to cover major systems (about $500 per year plus deductible). Ashburn residences normally rent quickly and have generally decent tenants, as long as you screen them well. Since it's a townhouse, renovations are much cheaper than SFH's. If you can get a decent tenant, there really is no problem with being a landlord and it can be a pretty easy gig. You just have to make sure you have a backup if you go out of town. I've been a landord for over six years. Had some challenges but nothing too bad.

We have a decent amount of equity (close to $100K). Do I need to refinance the home? Is this mandatory? I had no clue. I thought I could stick to my current loan that I refinanced last year.

[vauser]

Originally Posted by ~Pajama mama~

Ted Bear nailed it!!!!! I added my own answers to his questions to give you some perspective from someone who has done it. We consider it a huge mistake..sell while you can.

Oh my goodness. If I have about $100K in equity in the house and didn't want to use it towards my down payment for the new home, how else would I invest that money other than keep it as "cash"? That's one dilemma we have.

Another is - we bought the home about a decade ago and hence, have this equity. However, we have seen the home go to about $465K when the market was a true bubble. So, one part of us seems to throw the question if "we are doing a mistake in selling a home at this really bad market" when we could find a way to keep it.

Thoughts?

[vauser]

Some more clarifications:

* We are a landlord already as we have another investment property (condo). So, we know a little about landlord-ing.
* However, I am not handy at all around the house so we end up hiring someone for just about anything that goes wrong. A few things did go wrong at the condo but, fortunately, it wasn't our fault and the insurance covered it (and premiums didn't go up all that much).
* How different is it to manage a townhouse that is a rental compared to a condo?
* We can manage without a tenant for 6 months but after that, it is going to get tricky. Our impression was "it is super easy to find a tenant" mainly based on the condo rental experience but don't know if a townhouse is a different beast (of course, expected rent is higher as well here).

I am inclined to selling it and am leaning more towards it but, as always, want to check the thoughts of the wise men and women in this forum. Ultimately, we don't want to be the stupid ones who sold a house @ $325K when a retail boom in the area (Loudoun One, etc) ends up increasing the value to like $450K in another 3-5 years. It would be a bummer.

But, couple of things I have learnt here already:

* There is a chance I may have to refinance the loan.
* Simply because rent covers mortgage, it doesn't mean it is a good decision to keep.

[MrRational]

Originally Posted by vauser

we bought the home about a decade ago and hence, have this equity.
However, we have seen the home go to about $465K when the market was a true bubble.

No; you didn't see the house go to $465K.
The only way that YOU could see the house go to any level is to have sold it then.

If you CAN'T sell at a reasonable price **AND** all the interior finish materials are shot anyway...
then you can justify taking a chance by renting it out **AS IS** for a few years...
hoping that the market will maybe turn around later.

You can then use that rental income to pay for the new interior finishes and major appliances
and likely kitchen remodel and the then 20 yo HVAC equipment and roof a retail sale will require then.
Be sure to hold onto all that rental income for the duration.


Dusty Springfield - Wishin' And Hopin' - YouTube

[rjrcm]

Originally Posted by vauser

We have a decent amount of equity (close to $100K). Do I need to refinance the home? Is this mandatory? I had no clue. I thought I could stick to my current loan that I refinanced last year.

It's never mandatory to refinance.