bought a duplex, now might have to move to Japan.
Rental Property Investor · Greer, SC · Member since 2013 · 35 posts · 8 votes
Earlier this year I bought my first duplex in Ogden Utah, just north of salt lake city, things have been great, living in half and renting the other, but now my company is probing me for a potential mive to Japan. I will be going in January for at least 3 months, but after that I have to get a visa, or claim residency there. so now I'm trying to figure out what to do about my duplex, I am not very well networked in utah, and now I have to think about renting the half I live in and getting a property manager, or just selling. anyone with experience or advice?
I would ask yourself what your plan was when you bought it? Any investment purchase should be done with a plan, and unless your plan was to live there in 1/2 of it until you die then I would just continue on with your original plan (just maybe accelerating the dates it sounds like).
If this change of circumstance changes your plan as well then just re-evaluate based on your new situation. For example, do you enjoy real estate? Will you be coming back to the area after an assignment in Japan, or would you end up in an entirely different area? What are your numbers on the property? Are you making money on it (or would you, after moving out and hiring a property manager)? Would you consider selling on a lease option or seller financing so you could still receive some monthly income but not need to deal with the property itself, or would you just want to sell outright and move on?
Bottom line is that only you can decide what works best for you. If you do decide to sell, I think there are several people here (myself included) that would consider buying it and/or that could help you sell. And if you decide to keep, I think there are several people here that could give you recommendations for good property managers in the area.
Figure out what is best for your situation and then put the word out and we can assist.
Tough call, every property and investor is different but I would say if you can find a good PM company you trust and you make make the numbers work try to hang on to it and create some extra cash flow.
Having said that, if the numbers do not work or you just think the property will be more work than it is worth then sell it and enjoy Japan. You can always dive back into real estate if your company bring you back to the US.
Best of luck on the decision and the new opportunity abroad!
I would ask yourself what your plan was when you bought it? Any investment purchase should be done with a plan, and unless your plan was to live there in 1/2 of it until you die then I would just continue on with your original plan (just maybe accelerating the dates it sounds like).
If this change of circumstance changes your plan as well then just re-evaluate based on your new situation. For example, do you enjoy real estate? Will you be coming back to the area after an assignment in Japan, or would you end up in an entirely different area? What are your numbers on the property? Are you making money on it (or would you, after moving out and hiring a property manager)? Would you consider selling on a lease option or seller financing so you could still receive some monthly income but not need to deal with the property itself, or would you just want to sell outright and move on?
Bottom line is that only you can decide what works best for you. If you do decide to sell, I think there are several people here (myself included) that would consider buying it and/or that could help you sell. And if you decide to keep, I think there are several people here that could give you recommendations for good property managers in the area.
Figure out what is best for your situation and then put the word out and we can assist.
I agree with Mike that you need a plan. Before you build a plan you need to analyze the numbers.
If you can find a good property manager (difficult) and the numbers net a positive cash flow with all the expenses factored in, then keeping it shouldn't be a big deal.
If you would like help running numbers, just post'em and we'll all chime in and help.
Where in ogden is your duplex? ogden has great potential for rental as you probably already know. Having your first property and being so far would be hard for me unless you have a good support system here that you can trust other than a property manager. Then they can kinda be your eyes if things with a property manager go bad.
Great suggestions from both Mike & Jermey. And yes Japan is a long ways away! I work as a sea going captain, eight months out the year. Not only am I away, but frequently out of touch. With a trust worthy PM, it can be done. Even with eight rental homes in the SLC area, I can sleep good at night.
Best of luck, and this is a good problem to have!
If I recall, you bought this with a pretty high LTV loan. So you'd probably come out as a wash at best. Keep in mind that you got this loan at perhaps the best time in history and in a few years that will have value.
I use a great PM in Ogden who coincidentally manages for one of my clients living in Japan. So it can be done.
He has a quote that might apply here. Which would you rather do: Buy a property today and lose $100/month in cash flow or save $100/month for a down payment to buy a property in years into the future?
Remember your principal reduction and depreciation should be considered benefits in this situation. Good property management can usually rent the place for more than you can because of their broad marketing. And you bought in a market that's still appreciating. In the mid-long range, when you're back, you'll be glad you held on to it.
I'd recommend installing management while you are still there so any kinks can be worked out before you leave and they can start marketing the unit you're in. Message me for their contact info.
Good luck and congrats!
So thanks for the replies, I should provide some details I suppose. The duplex was built in 1999, I bought it for 210k, each unit rents for $850. my mortgage is about $1100 a month, so if I had both rented I would be cash flowing about $600 a month. I know it's not the best, but deals were hard to find and I pulled the trigger. I'm a stranger in Utah, I only have a few acquaintances that I work with, and no one I can rely on for back up. I'm not very social, or good at networking. was working on that but now this new was dropped on me. I'm not sure what to expect with property management as far as rates go either, still green. I think the units have a potential to be rented for more, 2 beds, 1 1/2 bath. it is a real duplex, not a conversion, and zoned as a mfr. I would like to keep it, but logistically for a newbie, it might be a bit much. As of now, there is a 90% chance of me going to Japan for 3 months, that won't be a problem, but after, there is a 60% chance I will be asked to stay and get my visa in Japan. It is very exciting for me, but my real estate aspirations will have to be put on hold in the mean time. I think if I redo the kitchens I could get $950, and I priced the cabinets at Ikea, each one would be around $3k if I did the labor myself.
@Jeremy Robinson I heard a quote once about owning properties that said something like, "you'll never regret holding on to a property" I'm sure it was said better than that. The bid debate I would have is what your long term goal is. Are you okay owning properties all over? If so getting the team in place to manage might be the thing to do. Most property mangers in Utah charge 8%-10% of rents to manage properties for you. There is also usually a placement fee of each new tenant.
You could reach out to different property managers and ask what they would think about doing the kitchen however being built in 99 the kitchen shouldn't be to bad. A way to think about it is if you spend $3,000 on the cabinets (what about counters) then upped rent $100 a month it would take you 30 months or 2.5 years with no vacancy.
You should reach out to @William Hochstedler and get info on his property manger.
I am sold on keeping the property, I have a great interest rate, and was just listening to the radio and it mentioned that the Fed is raising rates. even at 10% I can cash flow positive, I am just missing the additional support element. I actually want to buy more properties, but that seems unrealistic considering my situation, but my work posts for my housing during my stay in Japan, and if I get the other unit rented out and cash flow, I can come back with a substantial amount of savings. I'm looking into purchasing in idaho, I hear there are good returns there. the kitchens are bad, the precis owners did not screen well, and there is damage paint can't fix. they work, but I don't like them, so maybe it's an emotional thing I need to let go of.
I just want to say, everytime I post on here I get such great responses from so manyy kind and knowledgeable people. it warms my heart so many people are willing to help and provide input, this really is a great community BP has cultivated all thanks to you guys.
@Jeremy Robinson find a local REIA and share your situation with local investors/property managers. you have to reach out an touch your connections. I'd say keep the property and rent out both units. Best of luck!
I am sold on keeping the property, I have a great interest rate, and was just listening to the radio and it mentioned that the Fed is raising rates. even at 10% I can cash flow positive, I am just missing the additional support element. I actually want to buy more properties, but that seems unrealistic considering my situation, but my work posts for my housing during my stay in Japan, and if I get the other unit rented out and cash flow, I can come back with a substantial amount of savings. I'm looking into purchasing in idaho, I hear there are good returns there. the kitchens are bad, the precis owners did not screen well, and there is damage paint can't fix. they work, but I don't like them, so maybe it's an emotional thing I need to let go of.
I just want to say, everytime I post on here I get such great responses from so manyy kind and knowledgeable people. it warms my heart so many people are willing to help and provide input, this really is a great community BP has cultivated all thanks to you guys.
Jeremy will you be in the greater Tokyo area? Hit me up when you arrive in Japan, I live out here and own properties both here and in the US I manage remotely and always love catching up with similar investors!