Financially speaking should we sell or keep our condo as a rental?
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Anonymous
| If we sell our condo, we could most likely break even. If we keep it, based on the mortgage and the monthly rents for the area, we would most likely have a negative cash flow of $100 to $200 dollars per month once we factor in everything. Is it worth it in the long run to keep it even with the negative cash flow since one day it would be predominantly paid off by renters and we would own it? Is it better instead to just let it go and then later on down the road find a rental property with positive cash flow? Although, I am not sure at what point in life we would have enough cash on hand to qualify for a rental mortgage. |
Anonymous
| what area |
Anonymous
| I would let it go, esp. if you are in DC |
Anonymous
| South Alexandria - near Ft. Belvoir/Mount Vernon - our community is a pleasant pocket in a not so great neighborhood with lackluster schools |
Anonymous
|
How long is left on the mortgage?
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Anonymous
| Did you factor in repairs and vacancies? |
Anonymous
|
Heres another thing to consider...
We were ont he fence and kept ours because we could easily cover the mortgage with a renter BUT were just slapped with a $10k special assessment for the entire building due to repair emergencies. I wish we had sold! If that is a possibility in your future....sell! |
Anonymous
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Run the numbers tax-wise. For a rental property, your cost is only the interest (not principal) portion of your mtg payment, and then you can take depreciation on the property. So even if you were cashflow postive (sounds like yo'ure close to it), you may be at a loss tax-wise... which actually isn't a bad thing on your tax bill.
If you use a tax program, pop in some numbers to paly around with it. Remember rents shoudl go up over time, as will your prop taxes, but at least in my experience, rents go up faster. Also realize you'll pay higher prop taxes if the property is not your primary residence (at least in MD and DC.. prolly the same in VA), and technicall your mortgage loan rate may change as it's now an investment property (but in reality, the mtg company wont' check as long as you pay on time). |
Anonymous
| I live in South Alexandria, and rents are supposedly doing down in the area for 2014. I'd let go of it since your negative cash flow is only going to get worse when your tenants leave and you are unable to re-fill the unit at a higher price than what they are paying now. |
Anonymous
No. let it go. I have lived here for 40 yrs and that area has never been desirable and it never will. |
Anonymous
| Sell. One bad tenant who doesn't pay rent for a month or two while you're trying to evict them, and there goes all your profit for the year. |
Anonymous
|
Regrettably, I also say let it go. I had a condo in an up-and-coming area of DC and I rented it for a short time. The mental toll of dealing with tenants and maintenance issues was not worth the small tax benefit. And I had tenants who paid faithfully. If I had to deal with scam artists...ugh.
I know it's enticing, but I don't think holding on to a property makes sense if you're not going to be getting a profit from it right now. Chasing a future profit could prove elusive. |
Anonymous
| Wow, we've had a very different experience with our cond in S. Arlington. Granted we bought relatively cheap many years ago so our experience may not compare but we thought about selling so we wouldn't have to be landlords and deal with the hassle We've had two fantastic long term tenants who paid the place off for us and now we're so glad to own it still. |