I own a condo that I want to know if I should sell or rent it? Its 1200 sq ft 3 beds 2 bath vaulted ceilings. I owe 11700 on it and its worth around 194000 right now. My payment monthly is 750 and 175 hoa. Taxes this year were 1,330. Please help me decide.
What are comparable apartments in the complex/neighborhood renting for?
@Jared Allison What is the market rent in the area? This figure will help to see if how much you'll be making after paying expenses. Just be aware the condo fees tend to go up in the future.
the average rent I could get is 1200 to 1400
1200 to 1400........Rent is too low for value, you will have negative cash flow. Sell it
Thomas please help me understand how it would be negative cash flow thanks
Your mortgage, HOA and insurance eat up 1035. If we assume top rent of 1400 that leaves only $364 to cover all other expenses. Evictions, advertising, touch up between tenants, renovations, legal, accounting, advertising, utilities when vacant etc. to say nothing of special HOA assessments and HOA increases. $364 simply is not enough to cove all expenses.
In addition you have either $182K or $77K in equity either of which has a opportunity value of 10%.
Dead equity is killing your cash flow based on every 100K in equity is worth $833/month at 10%. With 77K in equity that is worth $641/month, deduct that from your $364 and you have negative $277/month cash flow without considering any other expences.
Thomas thank you very much for explaining that to me. It was a lot of great information and you explained it so could understand it.
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