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Has been awhile since I've been on CD! We had our house on the market last year, had an offer that fell thru after the inspection, we fixed the inspection items, then relisted the house, had a couple of second showings, then we got a direct hit from Hurricane Ike.
We did not have water in our house - unlike most in our city. But our landscaping/ACs/ductwork were trashed (as was the city itself) so we took it off the market. Months later, today, the city is steadily improving. We've fixed our damage, and we are definitely moving out of state this summer regardless of what happens w/our house. There are many homes for sale here, not many selling (per realtor). He said the economy, more than the hurricane damage, was the reason.
We know a couple interested in renting our house for a year. We're pretty confident they'll take decent care of it. We would not make any money on the rental - just cover our mortgage. The idea is that a) we would have money coming in rather than most likely having it sit and sit and sit and b) hopefully by next late spring early summer the market will be better. Not sure if it matters, but we bought it cheap, fixed it up, and will basically double our money when it sells - even if it sells for what's considered a low price.
If you understand what you are getting into owning a rental property can work. Even "low maintenance" situations can have quite a few unexpected costs.
Since it sounds like you have already positioned yourselves well (buying low, fixing up and taking your time) you really should do the math and see if you will do BETTER but just selling it now -- unless you want / need the income.
I made considerable profit from selling improved rental properties, but in hindsight much of that increase was due to growing demand for single family homes. If economic conditions are flat or declining that is not likely to be the case...
Wow - you've been through a lot house-wise. My thought is that you may want to give some serious consideration to selling - especially since it sounds like you'll be in a good position even at today's prices.
Tenants and home sellers are basically at cross purposes or certainly don't have shared goals. Tenants don't want to be inconvenienced while as a homeseller your goals would be to have your house be as accessible for showings as possible and as show-ready as possible. Sometimes it seems that tenants who are friends and family are even more difficult to work with (I'm a real estate agent) during the sales process. I've often found myself thinking "with friends like these..." when trying to show a friend/tenant-occupied property.
Also, your house never looks so good as it does when you're in it. Unless you luck into a tenant who's a great decorator (and neat!) the house may not look its best. And if you wait until they move out you might have to pay money to stage the house since a furnished house will typically show better - and sell for more - than an empty house.
Renting and the wear and tear, is not pleasant for lots of folks, and if you decide to rent it, then keep a close eye and make monthly visits to check on your house. Be prepared to repaint, recarpet, and make some normal repairs. Are you financially able to have that debt, and still be able to buy another home? If you do rent it, your ho ins, will be changed to probably only a fire policy, and thats more expensive than a ho. As earlier posters stated, stay away from friends and family, as they expect way too much, most ot the time. Good luck, and noone knows, what is best, but you.
This is exactly what many owners are doing for whom we manage properties. I suggest you try to get a little more than just covering your mortgage if possible. Most importantly I suggest that you interview a few local professional property managers so that you have proper representation and care of your home. Even if you could come back once a month for an inspection (which is a bit over the top for most tenants) that is an expense that would probably be much greater than your PM's commission.
Check into your state's landlord tenant law regarding the possible listing in the future with a tenant in residence. In my state there is nothing to prevent the owner from listing the property at any time; we just notify the tenant and usually discount their rent to compensate them for their trouble. If the property goes into escrow then they are given 45 Days Notice to vacate but may leave at any time after they're Noticed.
Good luck on either decision you make.
While I wouldn't say that the previous post is absolutely correct, you really should give it some thought. Specifically, what will you do if prices are lower next year than they are now? You'll have to decide for yourself whether it'd be better to sell now for at a price you can predict somewhat accurately, or take the risk of holding out for a year - the market that far out is tougher to predict.
Would you be OK with a loss at that point compared to today's price, and write it off as a reasonable bet that just happened to not go your way? Would you kick yourself if prices are higher in a year but you decide to sell today instead? Are you willing to be a long-term landlord if the market hasn't bounced back in a year? No need to answer these questions for us, but they are the ones that I'd be asking myself in this situation in addition to the questions about owning a rental property mentioned above.
Good luck. The good news is that from what you posted, I think you'll do fine either way. Sometimes that makes the decision harder, but it's still not a bad place to be all things considered.
Thanks everyone ~ it has been a whirlwind week. We've decided to list it for sale on Monday (!) and see what transpires in the next month and a half. Our realtor says that our price is aggressive compared to the comps. If we don't have many showings nor serious interest (i.e. second showings) we'll rent it out for a year to our neighbors whom we trust to take care of it (and we'll take it off the market and rent something in our new locale), then we'll start the process again next spring. I doubt much real estate will move here during hurricane season '09 - and we have kids and school and stability to consider. We have no interest in being long-term landlords. Our timing was not the best
Please be sure that you have clearly outlined, in writing, what your neighbors will do for you and what you will compensate them for in the transaction. Mixing relatives/friends and business often does not turn out well. But, best wishes to you and I hope your house sells quick!
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