sell current home or rent? not sure how to calculate

[jimcav]

do to tightening lending, it does not seem possible for us to get a loan large enough to buy in SD unless we sell our house here in WA. the lender says we must rent at 125% of mortgage cost for it to zero–that is not possible. We bought at a peak (2006) with an 80/10/10, and it seems very likely with realtor fees and closing costs that we will lose that 10%. currently, the 80/10 is $2200/mo, and i think we can safely rent for 1800, maybe 1900. Is it simplistic to say something like being $300/mo negative renting means we’d need rent at that loss level for over 3 years to equal the loss of 37k if we sell now. I guess that assumes that between now and 3 yrs from now the home value doesn’t go up or down?
thanks
jim

[NotCranky]

If I were you I would have it on the market tomorrow.
You are going to loose more than $300 a month because of vacancies, advertisement,repairs and maybe unexpected trips to Wash. to deal with problems. By your own admission you bought at peak. If you are forced to throw in the towel later the odds are it is going to cost you much more.
There are not many areas ripe for buying here yet although it is getting better. It is a good idea to think about renting when you get here, maybe especially if you are going to keep that alligator in Wash. You’ll have a great chance to really do it right next time but getting into a world of hurt over the house won’t help that.

[jimcav]

well, that is succinct. i’ll hit up co-workers for a realtor recommendation
thanks
jim

[seattle-relo]

Definately sell! I have a good friend in the mortgage industry in Seattle, and even he is having a much harder time getting people approved and closed. As bullish as he is, he even sees prices dropping further in Seattle. I can recommend some excellent real estate agents in the Bellevue area if you need a referral.

Good luck!

[seattle-relo]

Definately sell! I have a good friend in the mortgage industry in Seattle, and even he is having a much harder time getting people approved and closed. As bullish as he is, he even sees prices dropping further in Seattle. I can recommend some excellent real estate agents in the Bellevue area if you need a referral.

Good luck!

[seattle-relo]

Definately sell! I have a good friend in the mortgage industry in Seattle, and even he is having a much harder time getting people approved and closed. As bullish as he is, he even sees prices dropping further in Seattle. I can recommend some excellent real estate agents in the Bellevue area if you need a referral.

Good luck!

[seattle-relo]

Definately sell! I have a good friend in the mortgage industry in Seattle, and even he is having a much harder time getting people approved and closed. As bullish as he is, he even sees prices dropping further in Seattle. I can recommend some excellent real estate agents in the Bellevue area if you need a referral.

Good luck!

[seattle-relo]

Definately sell! I have a good friend in the mortgage industry in Seattle, and even he is having a much harder time getting people approved and closed. As bullish as he is, he even sees prices dropping further in Seattle. I can recommend some excellent real estate agents in the Bellevue area if you need a referral.

Good luck!

[jimcav]

well, that is succinct. i’ll hit up co-workers for a realtor recommendation
thanks
jim

[jimcav]

well, that is succinct. i’ll hit up co-workers for a realtor recommendation
thanks
jim

[jimcav]

well, that is succinct. i’ll hit up co-workers for a realtor recommendation
thanks
jim

[jimcav]

well, that is succinct. i’ll hit up co-workers for a realtor recommendation
thanks
jim

[NotCranky]

If I were you I would have it on the market tomorrow.
You are going to loose more than $300 a month because of vacancies, advertisement,repairs and maybe unexpected trips to Wash. to deal with problems. By your own admission you bought at peak. If you are forced to throw in the towel later the odds are it is going to cost you much more.
There are not many areas ripe for buying here yet although it is getting better. It is a good idea to think about renting when you get here, maybe especially if you are going to keep that alligator in Wash. You’ll have a great chance to really do it right next time but getting into a world of hurt over the house won’t help that.

[NotCranky]

If I were you I would have it on the market tomorrow.
You are going to loose more than $300 a month because of vacancies, advertisement,repairs and maybe unexpected trips to Wash. to deal with problems. By your own admission you bought at peak. If you are forced to throw in the towel later the odds are it is going to cost you much more.
There are not many areas ripe for buying here yet although it is getting better. It is a good idea to think about renting when you get here, maybe especially if you are going to keep that alligator in Wash. You’ll have a great chance to really do it right next time but getting into a world of hurt over the house won’t help that.

[NotCranky]

If I were you I would have it on the market tomorrow.
You are going to loose more than $300 a month because of vacancies, advertisement,repairs and maybe unexpected trips to Wash. to deal with problems. By your own admission you bought at peak. If you are forced to throw in the towel later the odds are it is going to cost you much more.
There are not many areas ripe for buying here yet although it is getting better. It is a good idea to think about renting when you get here, maybe especially if you are going to keep that alligator in Wash. You’ll have a great chance to really do it right next time but getting into a world of hurt over the house won’t help that.

[NotCranky]

If I were you I would have it on the market tomorrow.
You are going to loose more than $300 a month because of vacancies, advertisement,repairs and maybe unexpected trips to Wash. to deal with problems. By your own admission you bought at peak. If you are forced to throw in the towel later the odds are it is going to cost you much more.
There are not many areas ripe for buying here yet although it is getting better. It is a good idea to think about renting when you get here, maybe especially if you are going to keep that alligator in Wash. You’ll have a great chance to really do it right next time but getting into a world of hurt over the house won’t help that.

[Navydoc]

Do not forget to add the amount the house depreciates over that same 3-year period to your monthly losses. If the house depreciates 10%, which I think is a quite realistic possibility, the $37,000 loss doesn’t look so bad any more. I agree with my fellow Piggs, sell immediately (if you can).

[(former)FormerSanDiegan]

I would not be looking to buy immediately in San Diego. It is typically better to move, rent a while, and do your homeowrk with your feet on the ground here first. There are a lot of subtleties to real estate that are hard to glean from web searches and first impressions.

Now, about that house in Washington… I cannot speak to any opinion as to whether houses are due for a 10% or more decline there. But I’d like to offer a counter-opinion that we rarely get on this board.
As a landlord, who was in a similar position to you 6 years ago, I would look at it this way: Accounting for maintenance, vacancies, and management, your negative will likely average roughly 500 per month over the next 5-6 years (probably more like 600-700 per month initially, then decreasing with rent increases). After 5 or 6 years rents are likely to increase to the point where you break even. You will likely break even after taxes much sooner (maybe even in year 1) because of the depreciation write-off.

So, fast forward about 6 years … AT that point you will have a property that is likely to be breaking even or slightly positive cash flow. Your tenants will be paying it off over the next 20-25 years. All that for the equivalent of a monthly payment on a new car for the next 6 years.
Of course, I am assuming that rents increase at 3-4% per year and that we are not entering the next great depression.
The real question is whether or not you are suited to be a property owner or whether you might be better off selling and investing the 600 bucks a month in something else.

Others might opt to avoid the whole landlord thing or investment alternatives and just enjoy a new 5-series every few years.

[Doofrat]

I can understand getting into the landlord thing if you had some money and you were in a down market and got some smokin’ deals on real estate and entered into the whole thing cash flow positive. That is the only reason I can see to take on the hell that being a landlord apparently can be.
This idea of taking on the landlord role (of which most people know nothing about, me included) for negative cash flow is just insane! Is it just me?

[jimcav]

thanks all, it is a bit complex for me to analyze–especially when the future home values are so uncertain. we already have a home we rent (last duty station in maryland). i’m across the sound from seattle, so if anything i think a weaker housing market. it is hard to emotionally let go of 37k in one fell swoop, but it sounds as if even with the tax deductions we can take from a negative income rental that it will add up to at least that, and of course possibly much more if we have to sell in 3 years at an even greater loss–yuck. from what i understand, at least by selling now, i might have the possibility of qualifying for a loan to buy in SD if something comes along. right now, the areas my wife wants to be (schools) seem to be charging home prices over 12 times the annualized rent price–which from what i’ve read here means prices will be falling (except in la jolla and coronado, where they may stay above 12x ??)
thanks
jim

[(former)FormerSanDiegan]

So you already have a rental property, so you should fully understand all the tax implications, misc costs, and hassles.

I would not trade potential future losses in Washington for potential future losses in San Diego, but it does seem to make sense to me for you to sell your current house in order to have some dry powder for your purchase down here sometime in 2009 or so.

By the way, where are you finding houses in San Diego for 12x annual rent? That’s about 8.3% gross return. Most places I am familiar with would be more like ~6% gross or at least 15x annual rent.

Seems to me that a place where one could find 12x annual rent would would likely be cheaper (on a monthly basis) to own than rent, with interest rates around 6%. A home priced at 12x annual rent might imply a 400K property that rents at 2777/month. PITI with 20% down would be about $2400 per month. Before taking into account tax savings that is considerably cheaper than renting.

If I could truly find something at 12x annual rent, I would consider buying it.

[jimcav]

i did not find any homes in 92106 or 92103 at 12x rents, but i read several threads here that said that is what prices should be (10-12x). i think actually there are some prices in that range, but not where we want to live. we bought early enough and with enough down in MD that we are okay renting it, and the location is attractive to several good demographics of renters. as you note, we are timed exactly wrong with our WA house. so i guess it is time to not throw good money after bad and sell it.
thanks
jim

[jimcav]

i did not find any homes in 92106 or 92103 at 12x rents, but i read several threads here that said that is what prices should be (10-12x). i think actually there are some prices in that range, but not where we want to live. we bought early enough and with enough down in MD that we are okay renting it, and the location is attractive to several good demographics of renters. as you note, we are timed exactly wrong with our WA house. so i guess it is time to not throw good money after bad and sell it.
thanks
jim

[jimcav]

i did not find any homes in 92106 or 92103 at 12x rents, but i read several threads here that said that is what prices should be (10-12x). i think actually there are some prices in that range, but not where we want to live. we bought early enough and with enough down in MD that we are okay renting it, and the location is attractive to several good demographics of renters. as you note, we are timed exactly wrong with our WA house. so i guess it is time to not throw good money after bad and sell it.
thanks
jim

[jimcav]

i did not find any homes in 92106 or 92103 at 12x rents, but i read several threads here that said that is what prices should be (10-12x). i think actually there are some prices in that range, but not where we want to live. we bought early enough and with enough down in MD that we are okay renting it, and the location is attractive to several good demographics of renters. as you note, we are timed exactly wrong with our WA house. so i guess it is time to not throw good money after bad and sell it.
thanks
jim

[jimcav]

i did not find any homes in 92106 or 92103 at 12x rents, but i read several threads here that said that is what prices should be (10-12x). i think actually there are some prices in that range, but not where we want to live. we bought early enough and with enough down in MD that we are okay renting it, and the location is attractive to several good demographics of renters. as you note, we are timed exactly wrong with our WA house. so i guess it is time to not throw good money after bad and sell it.
thanks
jim

[(former)FormerSanDiegan]

So you already have a rental property, so you should fully understand all the tax implications, misc costs, and hassles.

I would not trade potential future losses in Washington for potential future losses in San Diego, but it does seem to make sense to me for you to sell your current house in order to have some dry powder for your purchase down here sometime in 2009 or so.

By the way, where are you finding houses in San Diego for 12x annual rent? That’s about 8.3% gross return. Most places I am familiar with would be more like ~6% gross or at least 15x annual rent.

Seems to me that a place where one could find 12x annual rent would would likely be cheaper (on a monthly basis) to own than rent, with interest rates around 6%. A home priced at 12x annual rent might imply a 400K property that rents at 2777/month. PITI with 20% down would be about $2400 per month. Before taking into account tax savings that is considerably cheaper than renting.

If I could truly find something at 12x annual rent, I would consider buying it.

[(former)FormerSanDiegan]

So you already have a rental property, so you should fully understand all the tax implications, misc costs, and hassles.

I would not trade potential future losses in Washington for potential future losses in San Diego, but it does seem to make sense to me for you to sell your current house in order to have some dry powder for your purchase down here sometime in 2009 or so.

By the way, where are you finding houses in San Diego for 12x annual rent? That’s about 8.3% gross return. Most places I am familiar with would be more like ~6% gross or at least 15x annual rent.

Seems to me that a place where one could find 12x annual rent would would likely be cheaper (on a monthly basis) to own than rent, with interest rates around 6%. A home priced at 12x annual rent might imply a 400K property that rents at 2777/month. PITI with 20% down would be about $2400 per month. Before taking into account tax savings that is considerably cheaper than renting.

If I could truly find something at 12x annual rent, I would consider buying it.

[(former)FormerSanDiegan]

So you already have a rental property, so you should fully understand all the tax implications, misc costs, and hassles.

I would not trade potential future losses in Washington for potential future losses in San Diego, but it does seem to make sense to me for you to sell your current house in order to have some dry powder for your purchase down here sometime in 2009 or so.

By the way, where are you finding houses in San Diego for 12x annual rent? That’s about 8.3% gross return. Most places I am familiar with would be more like ~6% gross or at least 15x annual rent.

Seems to me that a place where one could find 12x annual rent would would likely be cheaper (on a monthly basis) to own than rent, with interest rates around 6%. A home priced at 12x annual rent might imply a 400K property that rents at 2777/month. PITI with 20% down would be about $2400 per month. Before taking into account tax savings that is considerably cheaper than renting.

If I could truly find something at 12x annual rent, I would consider buying it.

[(former)FormerSanDiegan]

So you already have a rental property, so you should fully understand all the tax implications, misc costs, and hassles.

I would not trade potential future losses in Washington for potential future losses in San Diego, but it does seem to make sense to me for you to sell your current house in order to have some dry powder for your purchase down here sometime in 2009 or so.

By the way, where are you finding houses in San Diego for 12x annual rent? That’s about 8.3% gross return. Most places I am familiar with would be more like ~6% gross or at least 15x annual rent.

Seems to me that a place where one could find 12x annual rent would would likely be cheaper (on a monthly basis) to own than rent, with interest rates around 6%. A home priced at 12x annual rent might imply a 400K property that rents at 2777/month. PITI with 20% down would be about $2400 per month. Before taking into account tax savings that is considerably cheaper than renting.

If I could truly find something at 12x annual rent, I would consider buying it.

[jimcav]

thanks all, it is a bit complex for me to analyze–especially when the future home values are so uncertain. we already have a home we rent (last duty station in maryland). i’m across the sound from seattle, so if anything i think a weaker housing market. it is hard to emotionally let go of 37k in one fell swoop, but it sounds as if even with the tax deductions we can take from a negative income rental that it will add up to at least that, and of course possibly much more if we have to sell in 3 years at an even greater loss–yuck. from what i understand, at least by selling now, i might have the possibility of qualifying for a loan to buy in SD if something comes along. right now, the areas my wife wants to be (schools) seem to be charging home prices over 12 times the annualized rent price–which from what i’ve read here means prices will be falling (except in la jolla and coronado, where they may stay above 12x ??)
thanks
jim

[jimcav]

thanks all, it is a bit complex for me to analyze–especially when the future home values are so uncertain. we already have a home we rent (last duty station in maryland). i’m across the sound from seattle, so if anything i think a weaker housing market. it is hard to emotionally let go of 37k in one fell swoop, but it sounds as if even with the tax deductions we can take from a negative income rental that it will add up to at least that, and of course possibly much more if we have to sell in 3 years at an even greater loss–yuck. from what i understand, at least by selling now, i might have the possibility of qualifying for a loan to buy in SD if something comes along. right now, the areas my wife wants to be (schools) seem to be charging home prices over 12 times the annualized rent price–which from what i’ve read here means prices will be falling (except in la jolla and coronado, where they may stay above 12x ??)
thanks
jim

[jimcav]

thanks all, it is a bit complex for me to analyze–especially when the future home values are so uncertain. we already have a home we rent (last duty station in maryland). i’m across the sound from seattle, so if anything i think a weaker housing market. it is hard to emotionally let go of 37k in one fell swoop, but it sounds as if even with the tax deductions we can take from a negative income rental that it will add up to at least that, and of course possibly much more if we have to sell in 3 years at an even greater loss–yuck. from what i understand, at least by selling now, i might have the possibility of qualifying for a loan to buy in SD if something comes along. right now, the areas my wife wants to be (schools) seem to be charging home prices over 12 times the annualized rent price–which from what i’ve read here means prices will be falling (except in la jolla and coronado, where they may stay above 12x ??)
thanks
jim

[jimcav]

thanks all, it is a bit complex for me to analyze–especially when the future home values are so uncertain. we already have a home we rent (last duty station in maryland). i’m across the sound from seattle, so if anything i think a weaker housing market. it is hard to emotionally let go of 37k in one fell swoop, but it sounds as if even with the tax deductions we can take from a negative income rental that it will add up to at least that, and of course possibly much more if we have to sell in 3 years at an even greater loss–yuck. from what i understand, at least by selling now, i might have the possibility of qualifying for a loan to buy in SD if something comes along. right now, the areas my wife wants to be (schools) seem to be charging home prices over 12 times the annualized rent price–which from what i’ve read here means prices will be falling (except in la jolla and coronado, where they may stay above 12x ??)
thanks
jim

[Doofrat]

I can understand getting into the landlord thing if you had some money and you were in a down market and got some smokin’ deals on real estate and entered into the whole thing cash flow positive. That is the only reason I can see to take on the hell that being a landlord apparently can be.
This idea of taking on the landlord role (of which most people know nothing about, me included) for negative cash flow is just insane! Is it just me?

[Doofrat]

I can understand getting into the landlord thing if you had some money and you were in a down market and got some smokin’ deals on real estate and entered into the whole thing cash flow positive. That is the only reason I can see to take on the hell that being a landlord apparently can be.
This idea of taking on the landlord role (of which most people know nothing about, me included) for negative cash flow is just insane! Is it just me?

[Doofrat]

I can understand getting into the landlord thing if you had some money and you were in a down market and got some smokin’ deals on real estate and entered into the whole thing cash flow positive. That is the only reason I can see to take on the hell that being a landlord apparently can be.
This idea of taking on the landlord role (of which most people know nothing about, me included) for negative cash flow is just insane! Is it just me?

[Doofrat]

I can understand getting into the landlord thing if you had some money and you were in a down market and got some smokin’ deals on real estate and entered into the whole thing cash flow positive. That is the only reason I can see to take on the hell that being a landlord apparently can be.
This idea of taking on the landlord role (of which most people know nothing about, me included) for negative cash flow is just insane! Is it just me?

[Anonymous]

Submitted by FormerSanDiegan on March 28, 2008 – 10:00am.

So, fast forward about 6 years … AT that point you will have a property that is likely to be breaking even or slightly positive cash flow. Your tenants will be paying it off over the next 20-25 years. All that for the equivalent of a monthly payment on a new car for the next 6 years.
Of course, I am assuming that rents increase at 3-4% per year and that we are not entering the next great depression.
The real question is whether or not you are suited to be a property owner or whether you might be better off selling and investing the 600 bucks a month in something else.

The problem I see is that you bought at peak. To reiterate the above in regards to being a landlord, a lot of times it’s not all it’s cracked up to be. My landlord got a taste of that when he acted irresponsibly when dealing with me as a tenant.

To his credit, he had attempted to sell me the house when he realized the direction the market was headed. However, as prices plummeted, he found he had to keep the house or lose his downpayment. Still, he should have sold as he cannot afford the property. Howeer, his biggest mistake was to double-cross me, which proved a very costly mistake for him. The jewel is he can’t do anything about it.

How does that saying go about a woman scorned?…

😉

The point is, you bought a rental property at peak, your first mistake. Second, being a landlord is sometimes akin to opening a can of worms. I’d sell now.

Disclaimer: I’m not an expert on the market, this is my personal opinion.

[Anonymous]

Submitted by FormerSanDiegan on March 28, 2008 – 10:00am.

So, fast forward about 6 years … AT that point you will have a property that is likely to be breaking even or slightly positive cash flow. Your tenants will be paying it off over the next 20-25 years. All that for the equivalent of a monthly payment on a new car for the next 6 years.
Of course, I am assuming that rents increase at 3-4% per year and that we are not entering the next great depression.
The real question is whether or not you are suited to be a property owner or whether you might be better off selling and investing the 600 bucks a month in something else.

The problem I see is that you bought at peak. To reiterate the above in regards to being a landlord, a lot of times it’s not all it’s cracked up to be. My landlord got a taste of that when he acted irresponsibly when dealing with me as a tenant.

To his credit, he had attempted to sell me the house when he realized the direction the market was headed. However, as prices plummeted, he found he had to keep the house or lose his downpayment. Still, he should have sold as he cannot afford the property. Howeer, his biggest mistake was to double-cross me, which proved a very costly mistake for him. The jewel is he can’t do anything about it.

How does that saying go about a woman scorned?…

😉

The point is, you bought a rental property at peak, your first mistake. Second, being a landlord is sometimes akin to opening a can of worms. I’d sell now.

Disclaimer: I’m not an expert on the market, this is my personal opinion.

[Anonymous]

Submitted by FormerSanDiegan on March 28, 2008 – 10:00am.

So, fast forward about 6 years … AT that point you will have a property that is likely to be breaking even or slightly positive cash flow. Your tenants will be paying it off over the next 20-25 years. All that for the equivalent of a monthly payment on a new car for the next 6 years.
Of course, I am assuming that rents increase at 3-4% per year and that we are not entering the next great depression.
The real question is whether or not you are suited to be a property owner or whether you might be better off selling and investing the 600 bucks a month in something else.

The problem I see is that you bought at peak. To reiterate the above in regards to being a landlord, a lot of times it’s not all it’s cracked up to be. My landlord got a taste of that when he acted irresponsibly when dealing with me as a tenant.

To his credit, he had attempted to sell me the house when he realized the direction the market was headed. However, as prices plummeted, he found he had to keep the house or lose his downpayment. Still, he should have sold as he cannot afford the property. Howeer, his biggest mistake was to double-cross me, which proved a very costly mistake for him. The jewel is he can’t do anything about it.

How does that saying go about a woman scorned?…

😉

The point is, you bought a rental property at peak, your first mistake. Second, being a landlord is sometimes akin to opening a can of worms. I’d sell now.

Disclaimer: I’m not an expert on the market, this is my personal opinion.

[Anonymous]

Submitted by FormerSanDiegan on March 28, 2008 – 10:00am.

So, fast forward about 6 years … AT that point you will have a property that is likely to be breaking even or slightly positive cash flow. Your tenants will be paying it off over the next 20-25 years. All that for the equivalent of a monthly payment on a new car for the next 6 years.
Of course, I am assuming that rents increase at 3-4% per year and that we are not entering the next great depression.
The real question is whether or not you are suited to be a property owner or whether you might be better off selling and investing the 600 bucks a month in something else.

The problem I see is that you bought at peak. To reiterate the above in regards to being a landlord, a lot of times it’s not all it’s cracked up to be. My landlord got a taste of that when he acted irresponsibly when dealing with me as a tenant.

To his credit, he had attempted to sell me the house when he realized the direction the market was headed. However, as prices plummeted, he found he had to keep the house or lose his downpayment. Still, he should have sold as he cannot afford the property. Howeer, his biggest mistake was to double-cross me, which proved a very costly mistake for him. The jewel is he can’t do anything about it.

How does that saying go about a woman scorned?…

😉

The point is, you bought a rental property at peak, your first mistake. Second, being a landlord is sometimes akin to opening a can of worms. I’d sell now.

Disclaimer: I’m not an expert on the market, this is my personal opinion.

[Anonymous]

Submitted by FormerSanDiegan on March 28, 2008 – 10:00am.

So, fast forward about 6 years … AT that point you will have a property that is likely to be breaking even or slightly positive cash flow. Your tenants will be paying it off over the next 20-25 years. All that for the equivalent of a monthly payment on a new car for the next 6 years.
Of course, I am assuming that rents increase at 3-4% per year and that we are not entering the next great depression.
The real question is whether or not you are suited to be a property owner or whether you might be better off selling and investing the 600 bucks a month in something else.

The problem I see is that you bought at peak. To reiterate the above in regards to being a landlord, a lot of times it’s not all it’s cracked up to be. My landlord got a taste of that when he acted irresponsibly when dealing with me as a tenant.

To his credit, he had attempted to sell me the house when he realized the direction the market was headed. However, as prices plummeted, he found he had to keep the house or lose his downpayment. Still, he should have sold as he cannot afford the property. Howeer, his biggest mistake was to double-cross me, which proved a very costly mistake for him. The jewel is he can’t do anything about it.

How does that saying go about a woman scorned?…

😉

The point is, you bought a rental property at peak, your first mistake. Second, being a landlord is sometimes akin to opening a can of worms. I’d sell now.

Disclaimer: I’m not an expert on the market, this is my personal opinion.

[(former)FormerSanDiegan]

I would not be looking to buy immediately in San Diego. It is typically better to move, rent a while, and do your homeowrk with your feet on the ground here first. There are a lot of subtleties to real estate that are hard to glean from web searches and first impressions.

Now, about that house in Washington… I cannot speak to any opinion as to whether houses are due for a 10% or more decline there. But I’d like to offer a counter-opinion that we rarely get on this board.
As a landlord, who was in a similar position to you 6 years ago, I would look at it this way: Accounting for maintenance, vacancies, and management, your negative will likely average roughly 500 per month over the next 5-6 years (probably more like 600-700 per month initially, then decreasing with rent increases). After 5 or 6 years rents are likely to increase to the point where you break even. You will likely break even after taxes much sooner (maybe even in year 1) because of the depreciation write-off.

So, fast forward about 6 years … AT that point you will have a property that is likely to be breaking even or slightly positive cash flow. Your tenants will be paying it off over the next 20-25 years. All that for the equivalent of a monthly payment on a new car for the next 6 years.
Of course, I am assuming that rents increase at 3-4% per year and that we are not entering the next great depression.
The real question is whether or not you are suited to be a property owner or whether you might be better off selling and investing the 600 bucks a month in something else.

Others might opt to avoid the whole landlord thing or investment alternatives and just enjoy a new 5-series every few years.

[(former)FormerSanDiegan]

I would not be looking to buy immediately in San Diego. It is typically better to move, rent a while, and do your homeowrk with your feet on the ground here first. There are a lot of subtleties to real estate that are hard to glean from web searches and first impressions.

Now, about that house in Washington… I cannot speak to any opinion as to whether houses are due for a 10% or more decline there. But I’d like to offer a counter-opinion that we rarely get on this board.
As a landlord, who was in a similar position to you 6 years ago, I would look at it this way: Accounting for maintenance, vacancies, and management, your negative will likely average roughly 500 per month over the next 5-6 years (probably more like 600-700 per month initially, then decreasing with rent increases). After 5 or 6 years rents are likely to increase to the point where you break even. You will likely break even after taxes much sooner (maybe even in year 1) because of the depreciation write-off.

So, fast forward about 6 years … AT that point you will have a property that is likely to be breaking even or slightly positive cash flow. Your tenants will be paying it off over the next 20-25 years. All that for the equivalent of a monthly payment on a new car for the next 6 years.
Of course, I am assuming that rents increase at 3-4% per year and that we are not entering the next great depression.
The real question is whether or not you are suited to be a property owner or whether you might be better off selling and investing the 600 bucks a month in something else.

Others might opt to avoid the whole landlord thing or investment alternatives and just enjoy a new 5-series every few years.

[(former)FormerSanDiegan]

I would not be looking to buy immediately in San Diego. It is typically better to move, rent a while, and do your homeowrk with your feet on the ground here first. There are a lot of subtleties to real estate that are hard to glean from web searches and first impressions.

Now, about that house in Washington… I cannot speak to any opinion as to whether houses are due for a 10% or more decline there. But I’d like to offer a counter-opinion that we rarely get on this board.
As a landlord, who was in a similar position to you 6 years ago, I would look at it this way: Accounting for maintenance, vacancies, and management, your negative will likely average roughly 500 per month over the next 5-6 years (probably more like 600-700 per month initially, then decreasing with rent increases). After 5 or 6 years rents are likely to increase to the point where you break even. You will likely break even after taxes much sooner (maybe even in year 1) because of the depreciation write-off.

So, fast forward about 6 years … AT that point you will have a property that is likely to be breaking even or slightly positive cash flow. Your tenants will be paying it off over the next 20-25 years. All that for the equivalent of a monthly payment on a new car for the next 6 years.
Of course, I am assuming that rents increase at 3-4% per year and that we are not entering the next great depression.
The real question is whether or not you are suited to be a property owner or whether you might be better off selling and investing the 600 bucks a month in something else.

Others might opt to avoid the whole landlord thing or investment alternatives and just enjoy a new 5-series every few years.

[(former)FormerSanDiegan]

I would not be looking to buy immediately in San Diego. It is typically better to move, rent a while, and do your homeowrk with your feet on the ground here first. There are a lot of subtleties to real estate that are hard to glean from web searches and first impressions.

Now, about that house in Washington… I cannot speak to any opinion as to whether houses are due for a 10% or more decline there. But I’d like to offer a counter-opinion that we rarely get on this board.
As a landlord, who was in a similar position to you 6 years ago, I would look at it this way: Accounting for maintenance, vacancies, and management, your negative will likely average roughly 500 per month over the next 5-6 years (probably more like 600-700 per month initially, then decreasing with rent increases). After 5 or 6 years rents are likely to increase to the point where you break even. You will likely break even after taxes much sooner (maybe even in year 1) because of the depreciation write-off.

So, fast forward about 6 years … AT that point you will have a property that is likely to be breaking even or slightly positive cash flow. Your tenants will be paying it off over the next 20-25 years. All that for the equivalent of a monthly payment on a new car for the next 6 years.
Of course, I am assuming that rents increase at 3-4% per year and that we are not entering the next great depression.
The real question is whether or not you are suited to be a property owner or whether you might be better off selling and investing the 600 bucks a month in something else.

Others might opt to avoid the whole landlord thing or investment alternatives and just enjoy a new 5-series every few years.

[Navydoc]

Do not forget to add the amount the house depreciates over that same 3-year period to your monthly losses. If the house depreciates 10%, which I think is a quite realistic possibility, the $37,000 loss doesn’t look so bad any more. I agree with my fellow Piggs, sell immediately (if you can).

[Navydoc]

Do not forget to add the amount the house depreciates over that same 3-year period to your monthly losses. If the house depreciates 10%, which I think is a quite realistic possibility, the $37,000 loss doesn’t look so bad any more. I agree with my fellow Piggs, sell immediately (if you can).

[Navydoc]

Do not forget to add the amount the house depreciates over that same 3-year period to your monthly losses. If the house depreciates 10%, which I think is a quite realistic possibility, the $37,000 loss doesn’t look so bad any more. I agree with my fellow Piggs, sell immediately (if you can).

[Navydoc]

Do not forget to add the amount the house depreciates over that same 3-year period to your monthly losses. If the house depreciates 10%, which I think is a quite realistic possibility, the $37,000 loss doesn’t look so bad any more. I agree with my fellow Piggs, sell immediately (if you can).

[Anonymous]

I am currently faced with a similar situation. I am trying decide to sell my house, or rent it. Both have costs, and benefits. For me, either choice will be at a loss, but which is the bigger loss?

Suppose I can sell it at $50k below my purchase price, or rent by chipping in $200/mo – (negatively geared – generally a bad investment) Loosing at that rate, it would take 250 months, or nearly 21 years to loose $50k. In that time, surely, there will be an up-turn in the economy, and I’ll be able to sell at a price much closer to my original purchase price? If not, I’ll probably be too old to care anyway. Perhaps $200 is dreaming, and it my contribution is actually $500/mo. well then that’s still over 8 years to see those same losses.

If I sell, I lose it now. End of story. If I rent, I probably loose it, slowly, over a much longer period. But, I buy myself time until I have to sell. If I can sell for my original purchase price, sometime before 8 or 21 years (see above), then I loose less then $50k. In fact, with luck, I might even recoup all the costs if I can stay in the game long enough, and the market corrects enough. But, note that after 8 years, I’d need to sell for my purchase price + $50 to break even. There is some rent paid equity in the mix. Of course, if the economy never recovers, I will loose big time.

Is this a sensible risk under the circumstances?

[Diego Mamani]

Hard to say anything without more info.
1. The $50K you’d lose today, what % is that of the price you paid?
2. What % equity do you have in the house?
3. Is your mortgage for 30 yrs? Fixed rate?
4. How many years left in your mortgage?
5. The $200 monthly loss, is that after subtracting PITI only from the rent? Or do you also include an allowance for reserves, maintenance, operating expenses (other than PITI), and vacancies?

[Anonymous]

1. 13%
2. 30%
3. Amortization based on 20 years, but I’m in New Zealand, and the loans here have to be renewed every year or 2.
4. 1 year on one, and 2 years on the other.
5. After every cost to rent the property – we’d need an agent as we aren’t going to be in the country soon.

Thanks

[SD Realtor]

Curious. Why do you have renew a loan every year or two? Are you saying that everyone who owns residential real estate has to refinance every year or two? Somehow I am not sure if I believe that.

[Anonymous]

It is weird, yes, if you are from the US, and don’t get out much. The rest of world often does things differently.

Yes, if you get a loan at ASB, National Bank, TSB, Kiwi Bank, or any typical lending bank in NZ, then you can lock into a rate for at most about 5 years. Most people get a long one (3-5 years), short one (1-2 years), and some 10-20% of the loan on a variable rate loan of a year or two. You generally can’t pay extra on the balance of a fixed loan, only on a variable rate loan. That’s one main reason for having a bit on variable, in fact about the amount extra you think you’ll pay off that year. It’s complicated, but the way it is done. What worse is that 6% is really good, and rates at round 10% or more are not uncommon. Sucks to have a 6% loan (thinking it’s low) and have to renew the loan and something like 10% when it comes due. I personally would much rather lock into 3 years at 5% or less, get a home owner tax break. But, we can’t.

Don’t take my word for it. “A fixed rate home loan is a mortgage in which the interest rate does not change during the term of the loan, which anywhere from six months to five years.” [http://www.realestate.co.nz/resources/residential/home-loan-options]

What funny, is many Kiwi’s look at the way lending works in the states and think – No wonder the US is going to broke. Funny, eh? Not really.

[bearishgurl]

Fascinating, finance_king! Thank you for sharing.

[SD Realtor]

I have been alot of places including both the North and South islands but it was before I was involved with real estate. Given that we are in an environment that in my opinion will be pushing rates quite a bit higher, no way would I be involved in any such short term financing, seems to me that it would be suicidal. I do not know what the banks you mentioned use to index the rates off of, so if it is local only to NZ then perhaps you are not as exposed. Seems to me that not just the US is overextended so when the money supply tightens up, and it will tighten up someday, those exposed to such short term lending instruments will be in potential problematic situations. Given that environment, it may not be a bad idea for you to sell and then sit on cash to swoop in on some possible good deals in several years.

[Anonymous]

(I think I may have hijacked this discussion too much, sorry about that. Too late now though.)

I think I would be happy to rent this out, and rent somewhere else. I don’t really need to own my residence, I don’t think. I just want to learn to make good investments.

Another weird thing about NZ is that having a mortgage on an investment entitles you to write-off the interest, but you don’t get to do that on a mortgage on your primary residence. That’s opposite from the states where you can claim the mortgage interested on your primary home. Also, there is virtually no capitol gains tax here.

Anyway, blah blah about banks and loans. We need to sell, I fear. But, we have $100,000 in the house, and we don’t want to loose it all selling. If we could have just rented it out (negatively geared, no doubt) for a year or three, and then sell for higher price, we might have dodged a bullet. But, I’m not sure how long I’d have to wait.

There is word that a new crude oil reservoir has been found off our coast. That is likely to bring in some people that need houses. But, it’s all a gamble, for sure.

[Anonymous]

(I think I may have hijacked this discussion too much, sorry about that. Too late now though.)

I think I would be happy to rent this out, and rent somewhere else. I don’t really need to own my residence, I don’t think. I just want to learn to make good investments.

Another weird thing about NZ is that having a mortgage on an investment entitles you to write-off the interest, but you don’t get to do that on a mortgage on your primary residence. That’s opposite from the states where you can claim the mortgage interested on your primary home. Also, there is virtually no capitol gains tax here.

Anyway, blah blah about banks and loans. We need to sell, I fear. But, we have $100,000 in the house, and we don’t want to loose it all selling. If we could have just rented it out (negatively geared, no doubt) for a year or three, and then sell for higher price, we might have dodged a bullet. But, I’m not sure how long I’d have to wait.

There is word that a new crude oil reservoir has been found off our coast. That is likely to bring in some people that need houses. But, it’s all a gamble, for sure.

[Anonymous]

(I think I may have hijacked this discussion too much, sorry about that. Too late now though.)

I think I would be happy to rent this out, and rent somewhere else. I don’t really need to own my residence, I don’t think. I just want to learn to make good investments.

Another weird thing about NZ is that having a mortgage on an investment entitles you to write-off the interest, but you don’t get to do that on a mortgage on your primary residence. That’s opposite from the states where you can claim the mortgage interested on your primary home. Also, there is virtually no capitol gains tax here.

Anyway, blah blah about banks and loans. We need to sell, I fear. But, we have $100,000 in the house, and we don’t want to loose it all selling. If we could have just rented it out (negatively geared, no doubt) for a year or three, and then sell for higher price, we might have dodged a bullet. But, I’m not sure how long I’d have to wait.

There is word that a new crude oil reservoir has been found off our coast. That is likely to bring in some people that need houses. But, it’s all a gamble, for sure.

[Anonymous]

(I think I may have hijacked this discussion too much, sorry about that. Too late now though.)

I think I would be happy to rent this out, and rent somewhere else. I don’t really need to own my residence, I don’t think. I just want to learn to make good investments.

Another weird thing about NZ is that having a mortgage on an investment entitles you to write-off the interest, but you don’t get to do that on a mortgage on your primary residence. That’s opposite from the states where you can claim the mortgage interested on your primary home. Also, there is virtually no capitol gains tax here.

Anyway, blah blah about banks and loans. We need to sell, I fear. But, we have $100,000 in the house, and we don’t want to loose it all selling. If we could have just rented it out (negatively geared, no doubt) for a year or three, and then sell for higher price, we might have dodged a bullet. But, I’m not sure how long I’d have to wait.

There is word that a new crude oil reservoir has been found off our coast. That is likely to bring in some people that need houses. But, it’s all a gamble, for sure.

[Anonymous]

(I think I may have hijacked this discussion too much, sorry about that. Too late now though.)

I think I would be happy to rent this out, and rent somewhere else. I don’t really need to own my residence, I don’t think. I just want to learn to make good investments.

Another weird thing about NZ is that having a mortgage on an investment entitles you to write-off the interest, but you don’t get to do that on a mortgage on your primary residence. That’s opposite from the states where you can claim the mortgage interested on your primary home. Also, there is virtually no capitol gains tax here.

Anyway, blah blah about banks and loans. We need to sell, I fear. But, we have $100,000 in the house, and we don’t want to loose it all selling. If we could have just rented it out (negatively geared, no doubt) for a year or three, and then sell for higher price, we might have dodged a bullet. But, I’m not sure how long I’d have to wait.

There is word that a new crude oil reservoir has been found off our coast. That is likely to bring in some people that need houses. But, it’s all a gamble, for sure.

[SD Realtor]

I have been alot of places including both the North and South islands but it was before I was involved with real estate. Given that we are in an environment that in my opinion will be pushing rates quite a bit higher, no way would I be involved in any such short term financing, seems to me that it would be suicidal. I do not know what the banks you mentioned use to index the rates off of, so if it is local only to NZ then perhaps you are not as exposed. Seems to me that not just the US is overextended so when the money supply tightens up, and it will tighten up someday, those exposed to such short term lending instruments will be in potential problematic situations. Given that environment, it may not be a bad idea for you to sell and then sit on cash to swoop in on some possible good deals in several years.

[SD Realtor]

I have been alot of places including both the North and South islands but it was before I was involved with real estate. Given that we are in an environment that in my opinion will be pushing rates quite a bit higher, no way would I be involved in any such short term financing, seems to me that it would be suicidal. I do not know what the banks you mentioned use to index the rates off of, so if it is local only to NZ then perhaps you are not as exposed. Seems to me that not just the US is overextended so when the money supply tightens up, and it will tighten up someday, those exposed to such short term lending instruments will be in potential problematic situations. Given that environment, it may not be a bad idea for you to sell and then sit on cash to swoop in on some possible good deals in several years.

[SD Realtor]

I have been alot of places including both the North and South islands but it was before I was involved with real estate. Given that we are in an environment that in my opinion will be pushing rates quite a bit higher, no way would I be involved in any such short term financing, seems to me that it would be suicidal. I do not know what the banks you mentioned use to index the rates off of, so if it is local only to NZ then perhaps you are not as exposed. Seems to me that not just the US is overextended so when the money supply tightens up, and it will tighten up someday, those exposed to such short term lending instruments will be in potential problematic situations. Given that environment, it may not be a bad idea for you to sell and then sit on cash to swoop in on some possible good deals in several years.

[SD Realtor]

I have been alot of places including both the North and South islands but it was before I was involved with real estate. Given that we are in an environment that in my opinion will be pushing rates quite a bit higher, no way would I be involved in any such short term financing, seems to me that it would be suicidal. I do not know what the banks you mentioned use to index the rates off of, so if it is local only to NZ then perhaps you are not as exposed. Seems to me that not just the US is overextended so when the money supply tightens up, and it will tighten up someday, those exposed to such short term lending instruments will be in potential problematic situations. Given that environment, it may not be a bad idea for you to sell and then sit on cash to swoop in on some possible good deals in several years.

[bearishgurl]

Fascinating, finance_king! Thank you for sharing.

[bearishgurl]

Fascinating, finance_king! Thank you for sharing.

[bearishgurl]

Fascinating, finance_king! Thank you for sharing.

[bearishgurl]

Fascinating, finance_king! Thank you for sharing.

[Anonymous]

It is weird, yes, if you are from the US, and don’t get out much. The rest of world often does things differently.

Yes, if you get a loan at ASB, National Bank, TSB, Kiwi Bank, or any typical lending bank in NZ, then you can lock into a rate for at most about 5 years. Most people get a long one (3-5 years), short one (1-2 years), and some 10-20% of the loan on a variable rate loan of a year or two. You generally can’t pay extra on the balance of a fixed loan, only on a variable rate loan. That’s one main reason for having a bit on variable, in fact about the amount extra you think you’ll pay off that year. It’s complicated, but the way it is done. What worse is that 6% is really good, and rates at round 10% or more are not uncommon. Sucks to have a 6% loan (thinking it’s low) and have to renew the loan and something like 10% when it comes due. I personally would much rather lock into 3 years at 5% or less, get a home owner tax break. But, we can’t.

Don’t take my word for it. “A fixed rate home loan is a mortgage in which the interest rate does not change during the term of the loan, which anywhere from six months to five years.” [http://www.realestate.co.nz/resources/residential/home-loan-options]

What funny, is many Kiwi’s look at the way lending works in the states and think – No wonder the US is going to broke. Funny, eh? Not really.

[Anonymous]

It is weird, yes, if you are from the US, and don’t get out much. The rest of world often does things differently.

Yes, if you get a loan at ASB, National Bank, TSB, Kiwi Bank, or any typical lending bank in NZ, then you can lock into a rate for at most about 5 years. Most people get a long one (3-5 years), short one (1-2 years), and some 10-20% of the loan on a variable rate loan of a year or two. You generally can’t pay extra on the balance of a fixed loan, only on a variable rate loan. That’s one main reason for having a bit on variable, in fact about the amount extra you think you’ll pay off that year. It’s complicated, but the way it is done. What worse is that 6% is really good, and rates at round 10% or more are not uncommon. Sucks to have a 6% loan (thinking it’s low) and have to renew the loan and something like 10% when it comes due. I personally would much rather lock into 3 years at 5% or less, get a home owner tax break. But, we can’t.

Don’t take my word for it. “A fixed rate home loan is a mortgage in which the interest rate does not change during the term of the loan, which anywhere from six months to five years.” [http://www.realestate.co.nz/resources/residential/home-loan-options]

What funny, is many Kiwi’s look at the way lending works in the states and think – No wonder the US is going to broke. Funny, eh? Not really.

[Anonymous]

It is weird, yes, if you are from the US, and don’t get out much. The rest of world often does things differently.

Yes, if you get a loan at ASB, National Bank, TSB, Kiwi Bank, or any typical lending bank in NZ, then you can lock into a rate for at most about 5 years. Most people get a long one (3-5 years), short one (1-2 years), and some 10-20% of the loan on a variable rate loan of a year or two. You generally can’t pay extra on the balance of a fixed loan, only on a variable rate loan. That’s one main reason for having a bit on variable, in fact about the amount extra you think you’ll pay off that year. It’s complicated, but the way it is done. What worse is that 6% is really good, and rates at round 10% or more are not uncommon. Sucks to have a 6% loan (thinking it’s low) and have to renew the loan and something like 10% when it comes due. I personally would much rather lock into 3 years at 5% or less, get a home owner tax break. But, we can’t.

Don’t take my word for it. “A fixed rate home loan is a mortgage in which the interest rate does not change during the term of the loan, which anywhere from six months to five years.” [http://www.realestate.co.nz/resources/residential/home-loan-options]

What funny, is many Kiwi’s look at the way lending works in the states and think – No wonder the US is going to broke. Funny, eh? Not really.

[Anonymous]

It is weird, yes, if you are from the US, and don’t get out much. The rest of world often does things differently.

Yes, if you get a loan at ASB, National Bank, TSB, Kiwi Bank, or any typical lending bank in NZ, then you can lock into a rate for at most about 5 years. Most people get a long one (3-5 years), short one (1-2 years), and some 10-20% of the loan on a variable rate loan of a year or two. You generally can’t pay extra on the balance of a fixed loan, only on a variable rate loan. That’s one main reason for having a bit on variable, in fact about the amount extra you think you’ll pay off that year. It’s complicated, but the way it is done. What worse is that 6% is really good, and rates at round 10% or more are not uncommon. Sucks to have a 6% loan (thinking it’s low) and have to renew the loan and something like 10% when it comes due. I personally would much rather lock into 3 years at 5% or less, get a home owner tax break. But, we can’t.

Don’t take my word for it. “A fixed rate home loan is a mortgage in which the interest rate does not change during the term of the loan, which anywhere from six months to five years.” [http://www.realestate.co.nz/resources/residential/home-loan-options]

What funny, is many Kiwi’s look at the way lending works in the states and think – No wonder the US is going to broke. Funny, eh? Not really.

[SD Realtor]

Curious. Why do you have renew a loan every year or two? Are you saying that everyone who owns residential real estate has to refinance every year or two? Somehow I am not sure if I believe that.

[SD Realtor]

Curious. Why do you have renew a loan every year or two? Are you saying that everyone who owns residential real estate has to refinance every year or two? Somehow I am not sure if I believe that.

[SD Realtor]

Curious. Why do you have renew a loan every year or two? Are you saying that everyone who owns residential real estate has to refinance every year or two? Somehow I am not sure if I believe that.

[SD Realtor]

Curious. Why do you have renew a loan every year or two? Are you saying that everyone who owns residential real estate has to refinance every year or two? Somehow I am not sure if I believe that.

[Anonymous]

1. 13%
2. 30%
3. Amortization based on 20 years, but I’m in New Zealand, and the loans here have to be renewed every year or 2.
4. 1 year on one, and 2 years on the other.
5. After every cost to rent the property – we’d need an agent as we aren’t going to be in the country soon.

Thanks

[Anonymous]

1. 13%
2. 30%
3. Amortization based on 20 years, but I’m in New Zealand, and the loans here have to be renewed every year or 2.
4. 1 year on one, and 2 years on the other.
5. After every cost to rent the property – we’d need an agent as we aren’t going to be in the country soon.

Thanks

[Anonymous]

1. 13%
2. 30%
3. Amortization based on 20 years, but I’m in New Zealand, and the loans here have to be renewed every year or 2.
4. 1 year on one, and 2 years on the other.
5. After every cost to rent the property – we’d need an agent as we aren’t going to be in the country soon.

Thanks

[Anonymous]

1. 13%
2. 30%
3. Amortization based on 20 years, but I’m in New Zealand, and the loans here have to be renewed every year or 2.
4. 1 year on one, and 2 years on the other.
5. After every cost to rent the property – we’d need an agent as we aren’t going to be in the country soon.

Thanks

[Diego Mamani]

Hard to say anything without more info.
1. The $50K you’d lose today, what % is that of the price you paid?
2. What % equity do you have in the house?
3. Is your mortgage for 30 yrs? Fixed rate?
4. How many years left in your mortgage?
5. The $200 monthly loss, is that after subtracting PITI only from the rent? Or do you also include an allowance for reserves, maintenance, operating expenses (other than PITI), and vacancies?

[Diego Mamani]

Hard to say anything without more info.
1. The $50K you’d lose today, what % is that of the price you paid?
2. What % equity do you have in the house?
3. Is your mortgage for 30 yrs? Fixed rate?
4. How many years left in your mortgage?
5. The $200 monthly loss, is that after subtracting PITI only from the rent? Or do you also include an allowance for reserves, maintenance, operating expenses (other than PITI), and vacancies?

[Diego Mamani]

Hard to say anything without more info.
1. The $50K you’d lose today, what % is that of the price you paid?
2. What % equity do you have in the house?
3. Is your mortgage for 30 yrs? Fixed rate?
4. How many years left in your mortgage?
5. The $200 monthly loss, is that after subtracting PITI only from the rent? Or do you also include an allowance for reserves, maintenance, operating expenses (other than PITI), and vacancies?

[Diego Mamani]

Hard to say anything without more info.
1. The $50K you’d lose today, what % is that of the price you paid?
2. What % equity do you have in the house?
3. Is your mortgage for 30 yrs? Fixed rate?
4. How many years left in your mortgage?
5. The $200 monthly loss, is that after subtracting PITI only from the rent? Or do you also include an allowance for reserves, maintenance, operating expenses (other than PITI), and vacancies?

[Anonymous]

I could possibly pay down the loan with pitching more money into the “investment” hoping to make it positively geared. If I can do that, then I will cap off the amount I paid to buy the house, and the renter will pay the rest.

This is all banking on the fact that we aren’t going to be in a 20 depression. But, if that happens, I think I have bigger problems then this house.

[bearishgurl]

finance_king, do you absolutely have to move right now? And is your property located in San Diego County? If so, can you disclose the zip code??

[bearishgurl]

finance_king, do you absolutely have to move right now? And is your property located in San Diego County? If so, can you disclose the zip code??

[bearishgurl]

finance_king, do you absolutely have to move right now? And is your property located in San Diego County? If so, can you disclose the zip code??

[bearishgurl]

finance_king, do you absolutely have to move right now? And is your property located in San Diego County? If so, can you disclose the zip code??

[bearishgurl]

finance_king, do you absolutely have to move right now? And is your property located in San Diego County? If so, can you disclose the zip code??

[(former)FormerSanDiegan]

[quote=finance_king]I could possibly pay down the loan with pitching more money into the “investment” hoping to make it positively geared. If I can do that, then I will cap off the amount I paid to buy the house, and the renter will pay the rest.

This is all banking on the fact that we aren’t going to be in a 20 depression. But, if that happens, I think I have bigger problems then this house.[/quote]

Before you even consider the economics, I would only consider keeping it as a rental if you want to be a landlord over the long term and if the property makes sense as an investment property.

How much would you net in a sale ? (Sale price minus closing costs/commisions, use ~ 7% as a guesstimate).

Sounds like negative cash flow of $200 per month. How much principal are you paying each month ?

[faterikcartman]

Holy necropost Batman!

[faterikcartman]

Holy necropost Batman!

[faterikcartman]

Holy necropost Batman!

[faterikcartman]

Holy necropost Batman!

[faterikcartman]

Holy necropost Batman!

[(former)FormerSanDiegan]

[quote=finance_king]I could possibly pay down the loan with pitching more money into the “investment” hoping to make it positively geared. If I can do that, then I will cap off the amount I paid to buy the house, and the renter will pay the rest.

This is all banking on the fact that we aren’t going to be in a 20 depression. But, if that happens, I think I have bigger problems then this house.[/quote]

Before you even consider the economics, I would only consider keeping it as a rental if you want to be a landlord over the long term and if the property makes sense as an investment property.

How much would you net in a sale ? (Sale price minus closing costs/commisions, use ~ 7% as a guesstimate).

Sounds like negative cash flow of $200 per month. How much principal are you paying each month ?

[(former)FormerSanDiegan]

[quote=finance_king]I could possibly pay down the loan with pitching more money into the “investment” hoping to make it positively geared. If I can do that, then I will cap off the amount I paid to buy the house, and the renter will pay the rest.

This is all banking on the fact that we aren’t going to be in a 20 depression. But, if that happens, I think I have bigger problems then this house.[/quote]

Before you even consider the economics, I would only consider keeping it as a rental if you want to be a landlord over the long term and if the property makes sense as an investment property.

How much would you net in a sale ? (Sale price minus closing costs/commisions, use ~ 7% as a guesstimate).

Sounds like negative cash flow of $200 per month. How much principal are you paying each month ?

[(former)FormerSanDiegan]

[quote=finance_king]I could possibly pay down the loan with pitching more money into the “investment” hoping to make it positively geared. If I can do that, then I will cap off the amount I paid to buy the house, and the renter will pay the rest.

This is all banking on the fact that we aren’t going to be in a 20 depression. But, if that happens, I think I have bigger problems then this house.[/quote]

Before you even consider the economics, I would only consider keeping it as a rental if you want to be a landlord over the long term and if the property makes sense as an investment property.

How much would you net in a sale ? (Sale price minus closing costs/commisions, use ~ 7% as a guesstimate).

Sounds like negative cash flow of $200 per month. How much principal are you paying each month ?

[(former)FormerSanDiegan]

[quote=finance_king]I could possibly pay down the loan with pitching more money into the “investment” hoping to make it positively geared. If I can do that, then I will cap off the amount I paid to buy the house, and the renter will pay the rest.

This is all banking on the fact that we aren’t going to be in a 20 depression. But, if that happens, I think I have bigger problems then this house.[/quote]

Before you even consider the economics, I would only consider keeping it as a rental if you want to be a landlord over the long term and if the property makes sense as an investment property.

How much would you net in a sale ? (Sale price minus closing costs/commisions, use ~ 7% as a guesstimate).

Sounds like negative cash flow of $200 per month. How much principal are you paying each month ?

[Anonymous]

I could possibly pay down the loan with pitching more money into the “investment” hoping to make it positively geared. If I can do that, then I will cap off the amount I paid to buy the house, and the renter will pay the rest.

This is all banking on the fact that we aren’t going to be in a 20 depression. But, if that happens, I think I have bigger problems then this house.

[Anonymous]

I could possibly pay down the loan with pitching more money into the “investment” hoping to make it positively geared. If I can do that, then I will cap off the amount I paid to buy the house, and the renter will pay the rest.

This is all banking on the fact that we aren’t going to be in a 20 depression. But, if that happens, I think I have bigger problems then this house.

[Anonymous]

I could possibly pay down the loan with pitching more money into the “investment” hoping to make it positively geared. If I can do that, then I will cap off the amount I paid to buy the house, and the renter will pay the rest.

This is all banking on the fact that we aren’t going to be in a 20 depression. But, if that happens, I think I have bigger problems then this house.

[Anonymous]

I could possibly pay down the loan with pitching more money into the “investment” hoping to make it positively geared. If I can do that, then I will cap off the amount I paid to buy the house, and the renter will pay the rest.

This is all banking on the fact that we aren’t going to be in a 20 depression. But, if that happens, I think I have bigger problems then this house.

[Anonymous]

I am currently faced with a similar situation. I am trying decide to sell my house, or rent it. Both have costs, and benefits. For me, either choice will be at a loss, but which is the bigger loss?

Suppose I can sell it at $50k below my purchase price, or rent by chipping in $200/mo – (negatively geared – generally a bad investment) Loosing at that rate, it would take 250 months, or nearly 21 years to loose $50k. In that time, surely, there will be an up-turn in the economy, and I’ll be able to sell at a price much closer to my original purchase price? If not, I’ll probably be too old to care anyway. Perhaps $200 is dreaming, and it my contribution is actually $500/mo. well then that’s still over 8 years to see those same losses.

If I sell, I lose it now. End of story. If I rent, I probably loose it, slowly, over a much longer period. But, I buy myself time until I have to sell. If I can sell for my original purchase price, sometime before 8 or 21 years (see above), then I loose less then $50k. In fact, with luck, I might even recoup all the costs if I can stay in the game long enough, and the market corrects enough. But, note that after 8 years, I’d need to sell for my purchase price + $50 to break even. There is some rent paid equity in the mix. Of course, if the economy never recovers, I will loose big time.

Is this a sensible risk under the circumstances?

[Anonymous]

I am currently faced with a similar situation. I am trying decide to sell my house, or rent it. Both have costs, and benefits. For me, either choice will be at a loss, but which is the bigger loss?

Suppose I can sell it at $50k below my purchase price, or rent by chipping in $200/mo – (negatively geared – generally a bad investment) Loosing at that rate, it would take 250 months, or nearly 21 years to loose $50k. In that time, surely, there will be an up-turn in the economy, and I’ll be able to sell at a price much closer to my original purchase price? If not, I’ll probably be too old to care anyway. Perhaps $200 is dreaming, and it my contribution is actually $500/mo. well then that’s still over 8 years to see those same losses.

If I sell, I lose it now. End of story. If I rent, I probably loose it, slowly, over a much longer period. But, I buy myself time until I have to sell. If I can sell for my original purchase price, sometime before 8 or 21 years (see above), then I loose less then $50k. In fact, with luck, I might even recoup all the costs if I can stay in the game long enough, and the market corrects enough. But, note that after 8 years, I’d need to sell for my purchase price + $50 to break even. There is some rent paid equity in the mix. Of course, if the economy never recovers, I will loose big time.

Is this a sensible risk under the circumstances?

[Anonymous]

I am currently faced with a similar situation. I am trying decide to sell my house, or rent it. Both have costs, and benefits. For me, either choice will be at a loss, but which is the bigger loss?

Suppose I can sell it at $50k below my purchase price, or rent by chipping in $200/mo – (negatively geared – generally a bad investment) Loosing at that rate, it would take 250 months, or nearly 21 years to loose $50k. In that time, surely, there will be an up-turn in the economy, and I’ll be able to sell at a price much closer to my original purchase price? If not, I’ll probably be too old to care anyway. Perhaps $200 is dreaming, and it my contribution is actually $500/mo. well then that’s still over 8 years to see those same losses.

If I sell, I lose it now. End of story. If I rent, I probably loose it, slowly, over a much longer period. But, I buy myself time until I have to sell. If I can sell for my original purchase price, sometime before 8 or 21 years (see above), then I loose less then $50k. In fact, with luck, I might even recoup all the costs if I can stay in the game long enough, and the market corrects enough. But, note that after 8 years, I’d need to sell for my purchase price + $50 to break even. There is some rent paid equity in the mix. Of course, if the economy never recovers, I will loose big time.

Is this a sensible risk under the circumstances?

[Anonymous]

I am currently faced with a similar situation. I am trying decide to sell my house, or rent it. Both have costs, and benefits. For me, either choice will be at a loss, but which is the bigger loss?

Suppose I can sell it at $50k below my purchase price, or rent by chipping in $200/mo – (negatively geared – generally a bad investment) Loosing at that rate, it would take 250 months, or nearly 21 years to loose $50k. In that time, surely, there will be an up-turn in the economy, and I’ll be able to sell at a price much closer to my original purchase price? If not, I’ll probably be too old to care anyway. Perhaps $200 is dreaming, and it my contribution is actually $500/mo. well then that’s still over 8 years to see those same losses.

If I sell, I lose it now. End of story. If I rent, I probably loose it, slowly, over a much longer period. But, I buy myself time until I have to sell. If I can sell for my original purchase price, sometime before 8 or 21 years (see above), then I loose less then $50k. In fact, with luck, I might even recoup all the costs if I can stay in the game long enough, and the market corrects enough. But, note that after 8 years, I’d need to sell for my purchase price + $50 to break even. There is some rent paid equity in the mix. Of course, if the economy never recovers, I will loose big time.

Is this a sensible risk under the circumstances?

[Author]

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