Looking for advice: Sell or rent my underwater condo?

Question

Hi everyone,

I'm looking for some objective advice on what you'd do in my situation.

I'm currently in the military, located in the Denver area. I bought my first home—a 2-bedroom condo in East Aurora—in 2023 for $342,000 using a conventional loan. I am now coming up on a mandatory move (Permanent Change of Station) in the summer of 2027.

Unfortunately, the condo market has softened considerably. Based on recent sales and online estimates (no official assessments, but this is a best guess based on Zillow and sales in the neighborhood), my condo is now worth around $298,000, which is about what I still owe on the mortgage.

Here are the numbers:

• Purchase price: $342,000
• Current estimated value: ~$298,000
• Mortgage balance: ~$298,000
• Mortgage payment: ~$2,600/month
• HOA: ~$300/month
• Rent Zestimate: ~$2,000/month

On paper, renting appears to be cash-flow negative by roughly $900/month before accounting for maintenance, vacancies, and repairs.

The condo is in East Aurora, and from what I'm seeing, that market appears to be trending downward. I'm concerned values may continue to decline over the next several years, although I know no one can predict the market with certainty.

I'm struggling with whether it makes more financial sense to:

1. Sell next year (or earlier, and investigate living with family nearby, which may reduce costs) and realize a significant loss after commissions and closing costs, or

2. Keep it as a rental for a few years and hope the market eventually recovers

I'm very new to real estate, and this is my first home, so this has been a stressful situation. That said, I'm trying not to let emotion drive the decision. My goal is to make the most rational, numbers-based choice possible, and I'd really appreciate hearing from people with more experience who have been through something similar.

For those who have been in a similar situation:

• What numbers would you focus on before making this decision?
• At what point does renting make more sense than selling at a loss?
• Have any of you held onto an underwater condo and eventually come out ahead?
• If this were your property, what would you seriously consider doing?

I appreciate any insights or experiences you're willing to share. Thank you for taking the time to help someone who's still learning the real estate world.

Richard F. · Answer

As a condo owner, you have ZERO influence on what your condo Board does, or HAS done. This dramatically increases your risk.

If you do not fully understand your project's current Annual Budget, and their Reserve Funding Plan, you really do not know what the true financial condition of the project is. There could very easily be a major "Special Assessment" waiting for you on January 1 2027, or the following year, or....

You should receive these reports annually, usually in November. What is the reserve "per cent funded" for the current year? What is the "shortage", and how many units total in the project? When was their last Reserve Study to (theoretically) update the funding plan, and what recommendations did it make?

Assuming your monthly HOA fee is stable, or even relatively stable, without seeing and interpreting the actual numbers can be a huge mistake. If you have those reports, redact them and post a link so we can review and advise further on FACTS.

Jacob Camhi · Answer

that's a tough spot to be in, and i get how stressful it can feel. the main thing i'd look at first is what the *actual* market rent is in east aurora, not just a zestimate. call a few local property managers or check craigslist/zillow/apartments.com for 2-bedroom condos in your exact complex or nearby streets. if $2,000 is truly the going rate, you're looking at a $900 loss each month before property taxes, insurance (which will be higher for a rental), a vacancy reserve, and maintenance. that could easily be $1,200-$1,500 negative each month. then, compare that total monthly loss over the next few years until your p.c.s. against the upfront cost of selling (commissions, closing costs). sometimes a big, one-time hit, though painful, is less expensive than a slower, steady bleed.

Theresa Harris · Answer

If you are looking at having to pay someone to live there, run the math and ask yourself am I willing to spend >$10K a year for the next X years to avoid "losing" $45K.  Another way to look at it is, you may 'lose' $45K, but you 'saved' paying $72K in rent (using your $2K a month number) over the last 3 years.

No one knows what the market does. Where I am, think sell quickly in the spring (late April-May) and this year prices went up a lot and some people put in offers without seeing a house (they did do subject to viewing).

Jacob Walker · Answer

I wouldn’t look at it as selling at a loss versus waiting for the market to work it out. I’d look at how much it costs you each month to own it, and how much risk you are comfortable carrying while you wait.

$900 in negative cash flow before repairs and vacancy is significant. Add a PCS on top of that and the numbers can get hard quickly.

I would also look closely at the HOA. With condos, reserves and future assessments can alter the rental calculation pretty quickly. HOAs can also change rules around what you can and cannot do with a rental.

Before deciding, I would get an actual sale estimate from a local agent and an actual rent estimate from a property manager. Zillow can be a starting point, but it is not a decision-making tool.

If you are still looking at steep monthly losses after that, cutting your losses might be the cleaner option even if the initial hit stings. Holding only makes sense if you are comfortable with the negative cash flow and the condo risk beyond your original timeline.

Caleb Brown · Answer

I'd cut your losses and sell. Renting with that much of a negative cash flow is rough. Is STR possible? If that makes sense that would MAYBE be a reason to hold. Condos get hit the hardest in softer markets

Looking for advice: Sell or rent my underwater condo?

Most Popular Reply