Lansing Michigan keep or sell?

Question

I’m thinking about selling my current property. We bought it for 105 my appraiser is saying comps go between 90 on the low end and 140 (if we put work into it) but he still need to physically go there and get me more accurate numbers.

Our first tents were a nightmare, but current ones (2 years living there) are good however her lease is up in 2 months and wants to get out. It’s in an okay neighborhood near downtown and one of the only 5 bedroom homes.

Our current cash flow is $500 which is great but not worth anything if we have no rent lol.

Should we roll the dice and hopefully get good tenets again or sell the property and invest elsewhere/ cut our losses?

Drew Sygit · Answer

The value of this 5-bed seems to imply it's a Class C or D property.

Our 5-beds are some of the most challenging to rent - how many tenants need that many bedrooms.- pretty small percentage of the tenant pool:(

Just as important, what type of tenant will be attracted to 5-beds?- a lot of S8 tenants.

As long as you're okay with all this keep it.

ANOTHER option is to explore STR or MTR.

STR - many travelers are extended families that desire this many bedrooms.- Check out demand by seeing how many properties are available in the area on Airbnb and VRBO.

MTR (30+ days) - no idea about demand for 5 bedrooms, but check local regulations to see if any boarding room issues. Many MTR travelers only want a single bedroom or two. So, you could rent out by the room if city allows.

Troy DeLong · Answer

@Ian HuttonThat range from $90k to $140k is too big to make a smart decision. You should have them go there in person to get a solid as-is value and ARV if you fixed it up. If you're only gonna get $100k, I'd say keep and re-rent. If you can get north of $130k then I'd say look at selling. Depending on the property, our team may be interested in purchasing. We're out of Lansing, MI as well and own / manage tons of rentals around town. Let me know!

Vijay Friedman · Answer

@Ian HuttonIf the property is still producing positive cash flow, I'd try to evaluate it based on what you'd do with the equity if you sold. Comparing the expected return from keeping it versus redeploying that capital into another investment can make the decision much clearer. I'd also factor in the local rental demand before assuming a vacancy will be difficult to fill.

Lansing Michigan keep or sell?

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