Should I be selling my "PIGGIES" since the market is so HOT???

7 Replies

Is the market so hot now, that I should be selling some of my "Pigs"??

Example:

  • 0k is owed on the home (Paid $26k cash in 2009)
  • Mortgage: $0 
  • Recent appraisal: $92k
    • Comps for the area are between $90-$120k
    • Taxes: $1365
    • Insurance: $600
  • Rental comps: $800-$825
  • Purchased in 2009: $26k Cash
  • Will be needing a new furnace.
  • This is a 2 Bedroom House in a "B" area- 2 bedroom houses seem more difficult to rent in my area. Last tenant was there for 8 years! Has been listed for rent for 45 days with 3 applications, but all rejected due to credit/evictions. I'm getting tired of having open houses only to have deadbeats show up (or not at all, had 20 confirmations, only 2-3 actually show up)
  • If I apply the 2% rule to the 92k appraisal, I should be getting $1840 a month, at 1% rule,I should be getting $920, but it seems market will only accept around $800.

Any input would be greatly appreciated!

Thanks!!!

My # 1 CY Proverb ez to type sometimes hard to live by: "You can never lose money by taking a profit!" I have been reading on here that Indiana is a strong rental market with good values and excellent rental rates. I believe you already answered your own ? by stating you are tired of open house etc... trying to rent your home. Sell it and buy/2/3 more and make similar cash flow or higher , yet get appreciation on 3 props vs 1.

Best wishes

You can avoid open houses with unqualified renters by pre-screening them. Market the property on Zillow or whatever site works best for your area. When they contact you to inquire or set up a showing, ask about their credit, employment/income, Landlord references, etc. You can disqualify them on the spot and only show the home to people that meet your requirements.

It sounds like the home has been a great investment so I wouldn't give up so quickly. You could cash out the equity and use it to buy another property or you could sell this one and buy other property in an area that's growing and easier to rent.

If you have better places to put money, this may be a great opportunity since it is vacant. I agree 2 br is hard to lease out to.  That may be a reason you got it so low in 2009.

Jim,

I live in Crown Point,  so obviously I know the area well. What city is the house in? Two bed properties are very difficult to rent in our area., so I usually stay away from them. You might want to try using a property manager. I have one that knows the area very well and can probably find you quality tenants. I know that would reduce your profit margin, but not renting it, also reduces your margins.  PM me if you'd like more information. Best of luck.

Originally posted by @Jim C. :

Is the market so hot now, that I should be selling some of my "Pigs"??

Example:

  • 0k is owed on the home (Paid $26k cash in 2009)
  • Mortgage: $0 
  • Recent appraisal: $92k
    • Comps for the area are between $90-$120k
    • Taxes: $1365
    • Insurance: $600
  • Rental comps: $800-$825
  • Purchased in 2009: $26k Cash
  • Will be needing a new furnace.
  • This is a 2 Bedroom House in a "B" area- 2 bedroom houses seem more difficult to rent in my area. Last tenant was there for 8 years! Has been listed for rent for 45 days with 3 applications, but all rejected due to credit/evictions. I'm getting tired of having open houses only to have deadbeats show up (or not at all, had 20 confirmations, only 2-3 actually show up)
  • If I apply the 2% rule to the 92k appraisal, I should be getting $1840 a month, at 1% rule,I should be getting $920, but it seems market will only accept around $800.

Any input would be greatly appreciated!

Thanks!!!

 i would sell it. even if its cashflowing say 500 a month, you have capex and tenant headaches. you will pull out almost 10 yrs of buy and hold equivalent profits by selling. i would do this in a heartbeat.

now appraisal at that price doesnt mean you will find a buyer. if you are  to say sell below 70k, i would think about retaining it.

I think the 2% rule applies to how much you pay for it. You are well over that number. Also I'm positive you have gotten your money that you spent back out of the house and you are now making an infinite rate of return. There are experts in tenant placement that will still let you manage. I would hold onto it unless you find an amazing deal. You could also refinance it and pull out money to buy something else. Remember though, if your house went up it's a good bet the houses you are looking to buy went up as well. Don't overpay just because you can. If this is one of your "Pigs" then you must have an amazing portfolio! Good luck in your investing!