| Sell my rental house or keep renting it? |
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ABQTurtle
First Time Poster
Cash: $ 0.25
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Joined: 25 May 2011
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| Sell my rental house or keep renting it? |
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OK need help balancing this out. Here are the facts and numbers
1) Moved 3 years ago more that 1000 miles from my previous home
2) Did not sell my home but have been renting it for $1200 a month
3) Been lucky with very good long term renters but they may only be there another year.
4) House value is 170K (Was 190K three years ago) and Mortgage is currently at 120K
5) Monthly mortgage payment is $980/m (principal around $250/m, intrest around $550/m, escrow for tax and ins around $180/m).
6) I have 25K in credit cards that I really want to get paid off then I will be debt free (CC intrest is 9.9%)
7) I make good money, currently put about $800 a month toward credit card balance, and have credit score of 747.
 I am currently renting with a room mate and my portion of the rent and utlities is about $500 a month.
9) If I sell the house my plan would be to pay off the CC and put the additional money from the house and the $800 (plus additional intrest saved) in a savings account to buy a house in my new location.
10) I am in a more expensive economy where I am now and would price of new house would be between 250K and 350K
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Wed May 25, 2011 11:46 pm |
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littleroc02us
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I think because your 1000 miles away from a rental is tough becuase its hard to be a good landlord from that distance. Sell the home and pay off the cc's and then start banking your cash in an account and save as much as you can for a new house. How long will it take you to save over 20% for a down payment?
Romans 13:8 “Owe no man any thing, but to love one another: for he that loveth another hath fulfilled the law.”
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Thu May 26, 2011 1:05 pm |
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oldguy
Senior Member
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Location: arizona
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You are getting $220/m cash flow plus about a $125/m tax break due to the depreciation write off. So your profit is $345/m ($4100/yr) on the $40,000 of equity that you have invested. So you are earning about 10%/yr on your $40k investment. We can't know the future, but if history is a guide, it is likely that it will be worth more 3 years from now. Eg, if it goes up $10k or $20k in that time, that adds profit to your $40k net when you sell.
You make good money and your current housing cost is low, a better plan might be to stay steady for 2 or 3 yrs, take advantage of your current situation and pay down the $25k of cc loans and end up debt free with $75k of house equity in 3 yrs.
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Thu May 26, 2011 1:39 pm |
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coaster
Senior Advisor
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Location: Wisconsin
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One of the concerns is what happens when the good and steady current tenant leaves. If he has to hire a property manager, or if new tenants trash the place, that would reduce the return, and influence the decision to stay or sell. 
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Thu May 26, 2011 3:46 pm |
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xiaolizi
New Member
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Wed Jun 01, 2011 12:26 pm |
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Qikelih
First Time Poster
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Location: USA
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Make your front yard look attractive. Mow and trim your lawn. Get rid of overgrown shrubs and plants. Curb appeal goes a long way to attracting potential buyers. They'll want to see what's inside if the outside looks nice.
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Tue Jun 07, 2011 1:32 pm |
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kathyethans
Member
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Joined: 03 Jul 2011
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I agree with littleroc02us sell your rental house and pay all your cc's, it is much better if you buy a new house that is near to your work in order to save more on means of transportation.
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Mon Jul 04, 2011 3:49 am |
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Robison
New Member
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Location: Usa
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HI,
Sell the home and pay off the cc's and then start banking your cash in an account, and save as much as you can for a new house. How long will it take you to save over 18% for a down payment?
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Sat Jul 09, 2011 8:22 am |
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retire-early
Contributing Member
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Joined: 12 Jul 2011
Location: Las Vegas
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My vote is keep the cash cow. As far as the rental property getting vandalized, get your self a vandalism insurance coverage, mine is less than $100 a year.
"Live way below your means and opportunities will come knocking"
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Fri Jul 15, 2011 3:49 am |
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Caldwell
New Member
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Joined: 20 Jul 2011
Location: USA
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I have a great suggestion for you and i hope you will like it too, you should not have to sold you house as it is your asset for you for your time of emergency, so you have to be on rented and get money from it.
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Wed Jul 20, 2011 6:57 pm |
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Jason Drakes
New Member
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Joined: 27 Jul 2011
Location: USA
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The best thing which is need of the hour that you sell your home and move to a rental apartment. And use that money where you are needed and after sometime bought it back by your savings.
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Wed Jul 27, 2011 12:38 pm |
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scot184
Member
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Location: Los Angeles, CA
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Why not hang onto the house until prices move higher? You've got a renter, and who says you can't get another once they leave? Why sell at the bottom?
As far as the credit card debt goes, I would put more towards that each month if possible.
And you should definitely try to get a 0% APR balance transfer to cover a good chunk of that $25k if possible. You're paying hundreds each month in finance charges probably.
This can be avoided with the BT credit card - the beauty of it is you also get out of debt faster because you exit the debt spiral of finance charges being tacked onto your cc balance each month.[/u]
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Wed Jul 27, 2011 8:38 pm |
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kate032
Preferred Member
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Location: Michigan
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Usually, I would be more inclined to say sell the house. However, in this case, it doesn't sound like you're losing any money and also, housing prices are quite low. How long have you owned it?
You said you have a good salary but yet only pay $800 a month on credit card debt. I'd start eating more peanut butter and jelly and pay off that debt ASAP. Paying almost 10% interest on $25,000 is unfathomable to me. You don't have to live like a pauper, but there are countless books and websites about stretching a dollar. The faster you pay off that debt, the better you'll be.
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Fri Jul 29, 2011 3:08 am |
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Eric80
Full Member
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Hi,
I am no expert and there are a few people on this forum with good ideas like ‘oldguy’ seems to have a few ideas but it would be best to contact a specialist as it seems like a real dilemma and you wouldn’t want to regret using a forum in the future. In my opinion it would seem safer to try and wipe your debt away and save for a new house where you are based. It does depend on you and again only someone with the right specialist information that has experience in these situations maybe able to help you.
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Sat Jul 30, 2011 2:35 pm |
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