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.
I am very very new at this. We have only been homeowners almost one year now. We moved from California to Texas where we bought our first home. We live in a little suburb just 20 miles south of Dallas.
However, since my hubby didn't have a job lined up and I am a stay at home mom, we got a terrible interest rate at 7.75 on a no doc loan, which we were going to refinance after a year but now that I do not want to stay here, I don't know if that is necessary.
I should mention I would like to have this home sold or rented by August. So my question is: with this market, should I sell this house and be done with it. Or rent it out. It wouldn't be for a profit, since I could probably only rent it out at the cost of our payments due to the interest rate. So, if I should rent it, should I refi so I can turn a couple hundred profit (at least).
The problem I have with selling, is that since we have only been in it a year, it doesn't have much equity, and I don't want to walk out of here losing money. And since I haven't been here too long, I really have not 'settled' in and my home is not all that presentable, I don't have things on the walls in some rooms, and haven't put that decorators touch to use yet.
Are there any refinance loans at No cost?
How much will the realtors charge to sell? How does that work?
How long do homes in Texas sit on the market at this time?
how long compared to rental homes do they sit on the market?
NEVER, never, never, be a "long distance landlord". I've been a real estate investor for close to 30 years, and I wouldn't own a house more than a 15 minute drive from my residence!
You sound like you're about to fall into the trap of the "default" landlord. That is someone who can't (or thinks they can't) sell their house so they decide to become a REAL ESTATE INVESTOR. RE investing is WORK, not amateur hour. A rental that only throws off enough to cover your mortgage is going to cost you ABOUT TWICE THAT MUCH to maintain as a rental.
You will have costs for vacancies, management, repairs, upkeep, legal etc. Nationwide the average for single family home rentals is that you need TWICE the cost of the payment in rents to make a profit.
"Breaking even" is never a good reason to own rental property. Profit is the only reason. Some people get into rentals with the thought that a "slight negative cash flow" is OK, because they'll make it up in appreciation. Forget appreciation in TX, it's about 2-3% year.
Sell the house, NOW. Even if you have to take a slight loss now.
Here's another way to look at it. Would you go out of your way to buy this house specifically as an investment to begin a full time career in residential RE management? Answer that honestly and you'll know what to do in your current situation.
I am very very new at this. We have only been homeowners almost one year now. We moved from California to Texas where we bought our first home. We live in a little suburb just 20 miles south of Dallas.
Next time RENT for at least SIX MONTHS BEFORE BUYING! Especially if your moving to a totally new area. Your specific area is NOT a "hot" market in the Dallas area. If you had rented and looked around, drove around, asked lots of questions, paid attention to the real estate market in each specific location these things can be apparent.
However, since my hubby didn't have a job lined up and I am a stay at home mom, we got a terrible interest rate at 7.75 on a no doc loan, which we were going to refinance after a year but now that I do not want to stay here, I don't know if that is necessary.
RENT again and get things straightened out BEFORE buying. If you had waited to buy you could possibly have gotten a lower interest rate and not w/ an ARM. I'm not HUGE fan of always be a renter either but in SOME cases it PAYS TO BE ONE! This is one such.
I should mention I would like to have this home sold or rented by August. So my question is: with this market, should I sell this house and be done with it. Or rent it out. It wouldn't be for a profit, since I could probably only rent it out at the cost of our payments due to the interest rate. So, if I should rent it, should I refi so I can turn a couple hundred profit (at least).
GET IT ON THE MARKET NOW!!!! IF you want to sell this spring/summer. Again, your specific location w/in Texas is NOT going to be working with you. Watch this next time you plan to buy a house. Buying in an area that is REALLY FAR OUT from the main city, cheap real estate, too many "dirty" industrial neighbors, etc is NOT a "wise investment" ever.
The problem I have with selling, is that since we have only been in it a year, it doesn't have much equity, and I don't want to walk out of here losing money. And since I haven't been here too long, I really have not 'settled' in and my home is not all that presentable, I don't have things on the walls in some rooms, and haven't put that decorators touch to use yet.
Some of that decorating is not going to matter. You need to sell the "location". Sure the spiffed up house, clean and clutter free, that shows like a model will help sell yours before the one down the street so go ahead and do what you can do w/ what you have.
Are there any refinance loans at No cost?
Might be able to roll the closing costs into the mortgage.
How much will the realtors charge to sell? How does that work?
In Texas it is pretty much across the board 6%. There are a few "2%" realtors out there but they don't sell much and some agents avoid showing them. If you REALLY want to sell your going to have to use someone that attracts any and all buyers and realtors.
How long do homes in Texas sit on the market at this time?
2 days to 2 years. YOUR specific location is what plays a key here. Like I said before your location is NOT the most desireable in all of Texas. I've got homes around me in top notch condition that can go on the market for top dollar and sell that week. Others homes around can sit for over a year IF they don't look good, are not updated, etc. Around here a property that drops their price too much or lists at a really LOW price attracts LOTS of wacko offers and extreme lowballs. If you don't want those then list at a fair price and make sure your house is on par w/ those around.
how long compared to rental homes do they sit on the market?
Depends on your location.
Thank you so much for helping!
As I said earlier, even though your moving back to your home state your looking at areas your not familiar with. Do NOT BUY RIGHT AWAY!!!! Buying in the far out reaches of the big city w/ a long commute, in a lower priced real estate market is not always the best or wisest move.
My particular area in Dallas is not the most desirable place to live. It's not the slums but it does have a lot of controversial industrial polluters that wont attract all buyers.
On another note, there is so much NEW construction here it is rediculous so why would anyone who wants to move here move into MY home when they can have a Brand new home right next door.
I have already put the house for rent and Sale on CL just to see the hits, and it has received 5 for the rent listing and 0 for the sale listing...
So, I am not so positive that the way to go here is to Sell it!
Is it still a headache to rent it if I hire a property manager through the real estate company?
You have not stated why you want to move out by August. Have your housing needs changed? Did you decide to up-size or down-size? Is your husband working? Is his job in the area or will he be relocating? Your motivation for moving will be a driving factor in what to do with that property.
I am not sure about your exact scenario and numbers, but if you do not have much equity in the house and have a high interest rate, it may cost you a lot of money to rent out the house (that is, your rental income will not offset your mortgage and other operating expenses). Even if the rents cover the mortgage, there are additional operating expenses involved in a rental.
You may not be able to refinance your home as an owner-occupied residence if you turn around and make it a rental.
A good property manager is another big operating expense (perhaps 10% of your rent). You will also have to maintain the property (the landscaping, the plumbing, the electrical, the appliances, etc.)
I understand and agree with all the comments about long distance renting, the practical, physical and financial implications it can bring. But I would also like to encourage Kelly to give it a shot. We once owned a townhouse near a big military base. After we got orders to move we decided to put the townhouse up for a rental. We had long distance property management that worked even when we were overseas. Now the costs for that were very low, the property was in AL. Also the upkeep was not that bad. We usually managed to break even at the end of the year. Sometimes we had a loss that helped us on our taxes. Sometimes we had a plus that we put right back into the mortgage as extra premium. The only thing we were very demanding about was the quality of the renters. We made sure we had the final say. We had learned this lesson the hard way of course after the house was abused quite a bit after a family of four with little kids moved out. We would then usually aim at singles or couples. Due to the nature of military life we had a lot of turnover, a new tenant every year which can take some toll on the house.
You can try renting your house on a trial basis, just sign the rental contract for 6 or 12 months, max out all the security deposits and see how it goes.
We managed to hold on to our townhouse for 7 years and sold for a profit (which unfortunately was taxed as capital gains;-)), then we had enough money as down-payment for a "real" house.
Refi probably makes sense in your case if you want to rent and you can get a good deal and lower your costs that way and if there is no penalty.
Hope that helps
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.
mom of two is right
