Long time lurker, first time posting...
My grandfather recently passed, leaving his house to me. It’s completely paid off, just taxes due. Needs a ton of work, new furnace, interior, etc. Would I be better off selling for almost nothing, renovate then sell, or renovate then rent?
I’m leaning towards renovate/rent option as if ultimately like to get into rental ownership. I feel as if this could be a low risk opportunity to get my feet wet in the business without putting myself in such financial vulnerability.
Anyone have a similar situation or any advice?
Thanks in advance for any responses.
Sounds like you answered your own question. With such a low expense (taxes, maintenance, capex, etc) and the fact you mentioned that you want to get into to REI, you should renovate and rent out. Then refinance at a good cash flow rate and buy more rentals if you want to grow your portfolio.
Figure out if the rental return after renovations would be better than the rental return of another property you could buy if you renovate the current house and sell it (less closing costs). Either way you would have a rental. Or renovate it and live there a few years rent free.
Need to know the values.
If you can sell for a LOT now, and rent rates aren't great = sell
If it won't sell for much, but will rent for a lot and you can afford to rehab = rehab / rent
If there is large spread between it's current condition and the retail value with the rehab being reasonable then you might want to rehab / sell
Let the math will make your decision for you, this shouldn't be an emotional decision.
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