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[quote=Anonymous]I have a townhouse that I own with a business partner in a smaller city in VA that we lived in while we were in grad school.  We bought it for about $180K in '06 and it's probably worth about $150K now (apparently I live to buy high and sell low).  Our mortgage was about $140K and it was a five year ARM and with next year's adjustment (8-15 through 8-16) my rate will be 3%.  HOA fees are about $120 a month which covers all exterior maintenance including the lawn, siding and roof.  The townhouse was built in '95 and is in generally good working order.

We lived in it for three years while in school and began renting it out in '09 and have been getting about $1,100 a month for rent.  Tenant has a housing voucher so the most she will be able to pay starting in August is $950.  I think market rent for the place should probably be between $1,000 and $1,050.  If tenant leaves the carpet should probably be replaced as it will be about 10 years old and the walls will need to be painted so there will be a few thousand dollars in repairs.

Our options are as follows:
1.  Keep the tenant in there going forward.  We might lose a little bit of money from a cash flow perspective but per the amortization table we are getting about $300 in equity per month so it's not as bad of a loss as it seems.  Of course, that adjustable rate will likely go up.
2.  Keep the tenant in there until next March, use April to do repairs and get it ready to list for sale or rent by May 1.  Perhaps this is two separate options:  rent or sell in 2016.
3.  Have her leave in September and try to rent or sell.  This is my last choice option because by the time we do the necessary repairs we will be past the sales and renting cycle.

Any other options and/or points to consider with respect to the options identified above?

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