Should I sell or rent

4 Replies

Hello everyone, I purchase my first property back in 2015, as of today I have 100k in equity. I am truly interested in investing and need to know what the best move I should make. If I rent the property after mortgage, insurance and HoA, I will still be left with $300 cash flow... My goal is the have multiple properties, own multi-units and hopefully apartment buildings. I’m been a realtor for 5 years and have sold homes here and there while working my full time job. It’s been a week since I left my job of 11 years as a Marketing manager to pursue real estate full time... I’m scared if I take the cash flow and don’t have a plan I will end up using the funds, since I no longer have a paycheck coming every 2 weeks anymore. I also feel like I should sell and buy something small in northern Florida and rent it out... Can anyone give me a suggestion? I have several ideas in mind but have no idea where to start, Im also looking for investor and anyone that would like to invest in Florida. I’m open to a joint venture. I’m trying to cover all aspect in Real estate, next week I’m schedule to take the National MLO exam next week. Trust me I will pass. Can anyone give me a suggestion?

Having only accounted for mortgage, insurance and HOA you will never have positive cash flow from this property as a long term hold. You have neglected to account for all other operating costs associated with a rental property. In addition your 100K in equity is costing you at least $416/month in lost income based on a oportunity value or 10% and a mortggae interest rate at 5%.

There is no way you should be holding this property as a income investment. The numbers simply will never work out positive.

Sell 

Now that you have left your previous job, how do you plan to finance the properties you wish to acquire? 

$100K Is too much to have wrapped up in a property with no cash flow. Thomas S. is correct that you haven't accounted for maintenance, tax increases, and other variables. And even if you do get $300/month that's not a very good return on your money. I know some investors have a business plan to hold and make money on tax savings, appreciation, and debt reduction, but you said your goal is to have multiple properties, so unless you have a lot of cash I don't see how you could accomplish that without better leverage.

I left my day job, to pursue Real estate sales, and mortgage lending full time. Hopefully once I master that I should be able to prove to the banks I’m able afford financing on there properties...

I am definitely leaning towards selling, I was thinking I can purchase something with in norther florid our out of state with the profit I make. Is that a good idea?

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