Bought a house and now regret it. How to pull out?

Question

A few weeks ago I purchased a SFH to use as my first rental. It had great pictures, and both agents and the inspector made it seem like a deal.

I flew out to see it and... It is not what I expected. The seller must have been a great photographer because it is not in the amazing condition it appeared to be.

Currently I have it on the market looking for a renter. Now I want to just put it up for sale and cut my losses. I want to make sure it's in my legal rights to do this, as several prospective tenants paid an application fee.

Also, I don't want to scare away any buyers who would look at the property selling just weeks after it was sold to me. It had quite a few offers when I bought it (there was a bidding war), so I don't think I'll have an issue reselling it so long as I avoid putting up red flags. What's the best way to handle this situation?

Dan Maciejewski · Answer

Why not pop a renter in there at a price that makes sense?  Just because an investment isn't something you would live in doesn't mean people won't pay to live there.  You probably haven't seen any appreciation in a week, so you'll take a bath at 6-9%.  Put a year lease on it to at least alleviate that.

I also recommend to my buyers. so I'll say it here even though it;s too late -- Fly in and see it before your inspection period is up!!  The cost of a plane ticket is nothing compared to a bad investment!!!

Jeffrey Bower · Answer

"Just because an investment isn't something you would live in doesn't mean people won't pay to live there." Dan pulled the words out of my mouth. And from your details, it just is a cosmetic issue. Not a big deal if the bones is good. A nice cleaning and throw in a cute rug. Essentially, I'm in the same camp as Cole Raiford. Okay...

Jim D. · Answer

If the issues you have with the house are related to the bones, mechanicals, structure, etc., then I'd agree that you should probably cut your losses and move on.

If your issues are more cosmetic, I would probably stick with it and avoid taking a big loss on transaction costs. Different areas have very different expectations on what is acceptable for rental quality. Investors from nicer areas are often disappointed by the condition of the housing in these midwest cities, but locals likely have very different expectations. You have several applications, so it's clear the renters in your area like the house and want to live there.

At the very least, keep it for a year. If you list it for sale now, buyers will be skeptical of the house.

Aaron K. · Answer

@Tyler D'Alessandro if you already have applications why do you want to sell?

Amy Beth · Answer

@Jeffrey Bower. Those are minor issues to fix and you have pending applications.  Get the place cleaned up and carpet put down properly and rent it.  If you decide to sell over such small issues you may want to rethink your plan of becoming a landlord.  It may not be the job for you.

John Teachout · Answer

Hire someone to get into the property and clean it up. If carpet isn't fastened down and should be, have some do that. This doesn't sound like a big pit you've fallen into, it's a little chuck hole. Keep moving forward, resolve the issues and carry out your plan to rent the property. (and put the tools into your tool box, you'll need those later)

Jeshua Patrick · Answer

@Tyler D'Alessandro it shouldn’t matter if you like the property personally. What matters is if there is a large enough group of potential tenants willing to rent it at a price that makes sense for you financially. If you have people lining up to rent it at the price you marketed it for keep it. If not, find out why and if it makes sense to fix it or rent it at actual market rate. If, and only if, the answer to the first two questions is no then sell it but not before.

Theresa Harris · Answer

@Tyler D'Alessandro It is simple enough to have the carpet tacked down with tack strips, clean up the tools left behind (even sell them) and replace the bulbs.  Wait until you have  a tenant move out, you will have to deal with many of the same things plus some repairs.

This is your first rental, so it is probably more nerves.  If you buy another rental out of town, go and see it during the inspection or make a visit and look at a few houses yourself and then put offers in

A rental is about the numbers.  The house needs to be solid and clean for the tenants.  You have a number of applicants, so that's great.  Get it rented and go from there.

Jim D. · Answer

I wish my to-do list looked like that on the rentals I buy. Changing light bulbs, can you imagine!?

Your frustration is understandable, especially since no one on your team mentioned any of it. But if you let problems at this low of a level get you worked up, you're going to be miserable owning property. Wait until you have a sewer back up in your basement, fleas, a renter go to jail, or a fire. Take care of it quick and move forward; don't let it take a minute more of your mental space.

Cole Raiford · Answer

@Tyler D'Alessandro so it’s a bad property because it wasn’t cleaned up and there was rehab material and tools left behind?  Okay...

Bought a house and now regret it. How to pull out?

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