So we are just finishing up a beautiful house right now. Its a 3 bed/ 2.5 bath ranch style house with attached garage and detached garage in back both in wonderful shape.Fenced in yard with big above ground pool and porch around it. Also putting a brand new back porch on the back. Roof still have 10-15 years left, new gas furnace, new ac unit central air. Everything in the house has been remodeled. Its a nicest property we will have. Great location and beautiful neighborhood. B neighborhood. My question is to sell it or rent it? Here are my numbers. Will have $55,000 into it. Could sell between $100,000-$150,000. Or rent between $1000-$1200. Here are more detailed numbers from BP rental calculator. If you need anymore info please let me know. I also have 7 SFH all together and a duplex. Im $140,000 in debt
Cash on Cash ROI:
Monthly Cashflow: $439.09
Income-Expense Ratio (2% Rule): 1.96%
Total Initial Equity: $94,000.00
Gross Rent Multiplier: 1.89
Debt Coverage Ratio: 4.15
Purchase Cap Rate:
Pro Forma Cap Rate: 5.79%
@Antoine Martel rent or sell? Thanks
You never rent out a home with pool. The maintenance. If I get $439 a month + it is like breaking even. Lived in Monroeville, PA briefly so I know your area. If I have a home partially redone I will rent it. But I think you should consider unloading it if so much work have put in. Home prices probably have maxed out in some cities and I am not surprised if a recession is impending as Wall Street analysts using data to suggest so.
If you plan to live there someday then I will lease it out.
Sell. Pool is a deal breaker.
@Joshua D. like others have said, don't rent with a pool. Maintenance, water bills, liability, etc.
If I am reading your post correctly, you are into it for $55k. Is that your total cost including purchase price, or just what you spent to fix it up? If you are all in for $55k and it will rent for $1000/mo, I would just get rid of the pool and keep it as a rental.
@joshuaD... maybe I'm losing it, but did you ever say how much you paid for the house?
@Eric Hagymasi $55,000 is all in with purchase and rehab. The cost of insurance does not raise because of the pool. I checked on that I have a good relationship with my insurance company I use being I do a lot of business with them. But will see
If you can make about a $75,000 profit from a sale it would take about 14 years to get that via rent. If it would easily sell, I think that is what I would do. Then rinse and repeat.
One poster mentioned $439/month is like breaking even. I can't agree with that, especially on a 55K house. I would take that any day.
@Joshua D. I'm very curious as how you found a house with such a low price tag; or did you inherit the property?
As for your inquiry-- rent or sell...
I would advice to do whatever your goal is. Is it to build a portfolio with revenue generating properties? Is it to keep flipping and stacking your chips? I believe the fact that you have a property with a market value of at least $100k while only investing $55k, you already won regardless of what you decide.
@Joshua D. , if after seasoning your Lender will let you cash out 70% of THEIR (say) $130k appraisal, then I'd likely recommend taking that $91k to pay out any original loan you had on it, and you'd be set to go for your next one!
The realities of whether it truly rents out for $1k+/m AND appraises as suggested, will become apparent.
When such happy dilemmas happen to me, my first go-to mantra is: never sell good real estate! Congrats...