Sell or rent-out my Clairemont condo?

[(former)FormerSanDiegan]

… But here’s a stab:

Rents for 2BR/2Ba apartments in Clairemont can be between 1100 to 1400.

If you owe less than 180K at 6% or less (or owe less than 200K can refinance these days at rates around 5%), then you can start making a case for renting it out if you can get 1300 – 1400 in rent. You will be reasonably cash flow neutral at that point, accounting for tax benefits and principal paydown. BUt will have out-of-pocket expenses if you use a management company and for any repairs.

But again, this in only a guess without the actual numbers.

If you can rent these out at 1300-1400 and purchase for under 200K, it might start making sense for self-managed investors as long as investor owned rates are in the 6% or less range.

[clairemontian]

Appreciate the responses. Given our loan amount, a conservative rent value, hoa fees, prop management companyvfee, and taxes, we would come out ahead about $50 a month.

My question was more directed at whether I should sell given a short sale came on the market at about half as much as the last unit sold for two months ago. I’m thinking that even if the asking price was bid up 50%, it would still be below what we purchased our unit for. So the chances seem slim that after the short sale sells, we could sell our unit for the amount we paid for it. I guess we could try and put it on the market and see what happens…you never know. But since we’d be coming out on top if we were to rent it out, then it seems to make more sense to hold on to it.

[clairemontian]

Appreciate the responses. Given our loan amount, a conservative rent value, hoa fees, prop management companyvfee, and taxes, we would come out ahead about $50 a month.

My question was more directed at whether I should sell given a short sale came on the market at about half as much as the last unit sold for two months ago. I’m thinking that even if the asking price was bid up 50%, it would still be below what we purchased our unit for. So the chances seem slim that after the short sale sells, we could sell our unit for the amount we paid for it. I guess we could try and put it on the market and see what happens…you never know. But since we’d be coming out on top if we were to rent it out, then it seems to make more sense to hold on to it.

[clairemontian]

Appreciate the responses. Given our loan amount, a conservative rent value, hoa fees, prop management companyvfee, and taxes, we would come out ahead about $50 a month.

My question was more directed at whether I should sell given a short sale came on the market at about half as much as the last unit sold for two months ago. I’m thinking that even if the asking price was bid up 50%, it would still be below what we purchased our unit for. So the chances seem slim that after the short sale sells, we could sell our unit for the amount we paid for it. I guess we could try and put it on the market and see what happens…you never know. But since we’d be coming out on top if we were to rent it out, then it seems to make more sense to hold on to it.

[clairemontian]

Appreciate the responses. Given our loan amount, a conservative rent value, hoa fees, prop management companyvfee, and taxes, we would come out ahead about $50 a month.

My question was more directed at whether I should sell given a short sale came on the market at about half as much as the last unit sold for two months ago. I’m thinking that even if the asking price was bid up 50%, it would still be below what we purchased our unit for. So the chances seem slim that after the short sale sells, we could sell our unit for the amount we paid for it. I guess we could try and put it on the market and see what happens…you never know. But since we’d be coming out on top if we were to rent it out, then it seems to make more sense to hold on to it.

[clairemontian]

Appreciate the responses. Given our loan amount, a conservative rent value, hoa fees, prop management companyvfee, and taxes, we would come out ahead about $50 a month.

My question was more directed at whether I should sell given a short sale came on the market at about half as much as the last unit sold for two months ago. I’m thinking that even if the asking price was bid up 50%, it would still be below what we purchased our unit for. So the chances seem slim that after the short sale sells, we could sell our unit for the amount we paid for it. I guess we could try and put it on the market and see what happens…you never know. But since we’d be coming out on top if we were to rent it out, then it seems to make more sense to hold on to it.

[(former)FormerSanDiegan]

[quote=clairemontian]Appreciate the responses. Given our loan amount, a conservative rent value, hoa fees, prop management companyvfee, and taxes, we would come out ahead about $50 a month.

[/quote]

Your $50 will likely get eaten by repairs. (I have a 2 BR rental house I’ve owned 7 years and we have averaged about $1200 per year in repairs, new appliances, etc)
Also, in your analysis, how did you account for the principal portion of your payment ?
If you have $50 after taxes, including principal portion of payment as part of the expenses, then you are in good shape renting it out. You’ll essentially lock in future cash flow (I’m in the camp that anticipates inflation kicking in within the next 3 years) for reasonably minor out-of-pocket expenses.

Also, I would contact the listing agent for the short sale unit about potentially selling your unit and using them. They might give you the scoop on how much the short-sale unit will go for.

If you can rent it out and get the cash flow you describe, then I suspect you can sell it and still walk away with some cash. If not, I would sharpen your pencil on your analysis. Why not put it on the market and see ? Then rent it out if it doesn’t sell.

[(former)FormerSanDiegan]

[quote=clairemontian]Appreciate the responses. Given our loan amount, a conservative rent value, hoa fees, prop management companyvfee, and taxes, we would come out ahead about $50 a month.

[/quote]

Your $50 will likely get eaten by repairs. (I have a 2 BR rental house I’ve owned 7 years and we have averaged about $1200 per year in repairs, new appliances, etc)
Also, in your analysis, how did you account for the principal portion of your payment ?
If you have $50 after taxes, including principal portion of payment as part of the expenses, then you are in good shape renting it out. You’ll essentially lock in future cash flow (I’m in the camp that anticipates inflation kicking in within the next 3 years) for reasonably minor out-of-pocket expenses.

Also, I would contact the listing agent for the short sale unit about potentially selling your unit and using them. They might give you the scoop on how much the short-sale unit will go for.

If you can rent it out and get the cash flow you describe, then I suspect you can sell it and still walk away with some cash. If not, I would sharpen your pencil on your analysis. Why not put it on the market and see ? Then rent it out if it doesn’t sell.

[(former)FormerSanDiegan]

[quote=clairemontian]Appreciate the responses. Given our loan amount, a conservative rent value, hoa fees, prop management companyvfee, and taxes, we would come out ahead about $50 a month.

[/quote]

Your $50 will likely get eaten by repairs. (I have a 2 BR rental house I’ve owned 7 years and we have averaged about $1200 per year in repairs, new appliances, etc)
Also, in your analysis, how did you account for the principal portion of your payment ?
If you have $50 after taxes, including principal portion of payment as part of the expenses, then you are in good shape renting it out. You’ll essentially lock in future cash flow (I’m in the camp that anticipates inflation kicking in within the next 3 years) for reasonably minor out-of-pocket expenses.

Also, I would contact the listing agent for the short sale unit about potentially selling your unit and using them. They might give you the scoop on how much the short-sale unit will go for.

If you can rent it out and get the cash flow you describe, then I suspect you can sell it and still walk away with some cash. If not, I would sharpen your pencil on your analysis. Why not put it on the market and see ? Then rent it out if it doesn’t sell.

[(former)FormerSanDiegan]

[quote=clairemontian]Appreciate the responses. Given our loan amount, a conservative rent value, hoa fees, prop management companyvfee, and taxes, we would come out ahead about $50 a month.

[/quote]

Your $50 will likely get eaten by repairs. (I have a 2 BR rental house I’ve owned 7 years and we have averaged about $1200 per year in repairs, new appliances, etc)
Also, in your analysis, how did you account for the principal portion of your payment ?
If you have $50 after taxes, including principal portion of payment as part of the expenses, then you are in good shape renting it out. You’ll essentially lock in future cash flow (I’m in the camp that anticipates inflation kicking in within the next 3 years) for reasonably minor out-of-pocket expenses.

Also, I would contact the listing agent for the short sale unit about potentially selling your unit and using them. They might give you the scoop on how much the short-sale unit will go for.

If you can rent it out and get the cash flow you describe, then I suspect you can sell it and still walk away with some cash. If not, I would sharpen your pencil on your analysis. Why not put it on the market and see ? Then rent it out if it doesn’t sell.

[(former)FormerSanDiegan]

[quote=clairemontian]Appreciate the responses. Given our loan amount, a conservative rent value, hoa fees, prop management companyvfee, and taxes, we would come out ahead about $50 a month.

[/quote]

Your $50 will likely get eaten by repairs. (I have a 2 BR rental house I’ve owned 7 years and we have averaged about $1200 per year in repairs, new appliances, etc)
Also, in your analysis, how did you account for the principal portion of your payment ?
If you have $50 after taxes, including principal portion of payment as part of the expenses, then you are in good shape renting it out. You’ll essentially lock in future cash flow (I’m in the camp that anticipates inflation kicking in within the next 3 years) for reasonably minor out-of-pocket expenses.

Also, I would contact the listing agent for the short sale unit about potentially selling your unit and using them. They might give you the scoop on how much the short-sale unit will go for.

If you can rent it out and get the cash flow you describe, then I suspect you can sell it and still walk away with some cash. If not, I would sharpen your pencil on your analysis. Why not put it on the market and see ? Then rent it out if it doesn’t sell.

[sdduuuude]

The first thing you have to understand is that the amount you spent on the property has absolutely no nothing to do with the decision to sell this property or not. Get it out of your mind. Pretend you paid $1,000,000 for it, or pretend it was a gift. Whatever works for you, do it.

If you don’t understand why – read a finance book on “sunk cost” and internalize what it means.

OK. That’s out of the way.

Base your decision on the future cash flows the property will bring you under two different conditions:

1) you sell it and pocket the cash.

2) you don’t sell it and earn rent.

The analysis is now complicated by the fact that you don’t know how much you can sell it for. I’d recommend finding the break-even sales price. That is – if you sell for less than x, you will make more money renting it out, and if it sells for more than x, it is better to sell it.

Then, check the comps and put it up for sale at a price that will bring in offers.

If none of the offers are > x, don’t accept them.

[sdduuuude]

The first thing you have to understand is that the amount you spent on the property has absolutely no nothing to do with the decision to sell this property or not. Get it out of your mind. Pretend you paid $1,000,000 for it, or pretend it was a gift. Whatever works for you, do it.

If you don’t understand why – read a finance book on “sunk cost” and internalize what it means.

OK. That’s out of the way.

Base your decision on the future cash flows the property will bring you under two different conditions:

1) you sell it and pocket the cash.

2) you don’t sell it and earn rent.

The analysis is now complicated by the fact that you don’t know how much you can sell it for. I’d recommend finding the break-even sales price. That is – if you sell for less than x, you will make more money renting it out, and if it sells for more than x, it is better to sell it.

Then, check the comps and put it up for sale at a price that will bring in offers.

If none of the offers are > x, don’t accept them.

[sdduuuude]

The first thing you have to understand is that the amount you spent on the property has absolutely no nothing to do with the decision to sell this property or not. Get it out of your mind. Pretend you paid $1,000,000 for it, or pretend it was a gift. Whatever works for you, do it.

If you don’t understand why – read a finance book on “sunk cost” and internalize what it means.

OK. That’s out of the way.

Base your decision on the future cash flows the property will bring you under two different conditions:

1) you sell it and pocket the cash.

2) you don’t sell it and earn rent.

The analysis is now complicated by the fact that you don’t know how much you can sell it for. I’d recommend finding the break-even sales price. That is – if you sell for less than x, you will make more money renting it out, and if it sells for more than x, it is better to sell it.

Then, check the comps and put it up for sale at a price that will bring in offers.

If none of the offers are > x, don’t accept them.

[sdduuuude]

The first thing you have to understand is that the amount you spent on the property has absolutely no nothing to do with the decision to sell this property or not. Get it out of your mind. Pretend you paid $1,000,000 for it, or pretend it was a gift. Whatever works for you, do it.

If you don’t understand why – read a finance book on “sunk cost” and internalize what it means.

OK. That’s out of the way.

Base your decision on the future cash flows the property will bring you under two different conditions:

1) you sell it and pocket the cash.

2) you don’t sell it and earn rent.

The analysis is now complicated by the fact that you don’t know how much you can sell it for. I’d recommend finding the break-even sales price. That is – if you sell for less than x, you will make more money renting it out, and if it sells for more than x, it is better to sell it.

Then, check the comps and put it up for sale at a price that will bring in offers.

If none of the offers are > x, don’t accept them.

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