Is it Ever Worth it to Sell at a Loss?

Question

Good morning,

I'm 24, active-duty military, currently own 2 condos-1 long distance rental with tenants, the other primary residence w/ a roommate tenant, in San Diego. I recently discovered that I absolutely abhor roommate living and started to entertain the idea of selling my current primary residence (2/2) and downsize to a 1/1 so I can comfortably afford a mortgage without the need for tenant rental income to offset cost of ownership.

With that said, I bought my current residence, the 2/2, in March 2025 and will have to sell at a loss. It looks like, according to my realtor, I would need $30k-40k in order to completely payoff current loan (after selling), cover down on closing costs, fees (realtor's quote 1%), deposit or downpayment on a new property. I would love hear hear some opinions on this. Is it worth it for my peace of mind? I am truly going crazy with a roommate... I know for $10k, I'd cut my losses and do it without a second thought. But $30k-40k is a lot... or is not, in the grand scheme of peace of mind and long term appreciation of a 1/1 condo in San Diego?

Additionally, I know I have the option of renting the unit out entirely and then renting a studio for my residence which would put me in a similar position financially as my current situation w/ the roommate. Open to any and all thoughts, suggestions. Thank you!

-Brendan

Steve K. · Answer

Selling at a loss in your situation is not something I would even consider for a second. I’d find a different roommate (perhaps a romantic partner you can split the bills with) or live alone while getting a second stream of income to make the payments if necessary. Seeing as the property is in a high-appreciation market, you’re not just losing the money now if you sell but also the opportunity cost of all the money you would have made if you held. Tough it out would be my advice. How hard can it be to live with a roommate? My first property was a 4/3 with 7 roommates and 4 dogs. It wasn’t always easy but allowed me to get a foothold in an expensive market I otherwise wouldn’t have been able to afford, and it was the start I needed to break through from being a wage-slave living hand to mouth into becoming a successful investor. Toughing it out for a few years will likely make you a lot of money in appreciation and change your life in a very positive way, as opposed to losing tens of thousands now and setting yourself back.

Mark Cruse · Answer

Everyone is different and it depends on tolerance. I have never sold at a loss. If I'm ever in that situation, it would have to be a super sht-hot deal I'm chasing that is gonna make up for it. I'm not sure if you plan on a long journey to be an investor, but it appears you are willing to cut and run when you see trouble. REI is not a joke or some game with monopoly money. You can't just try it like selling cruises and determine you won't do it a few months later.   That is not going to work in this rouge business. Just curious; why would your primary residence be underwater that much when you got it a few months ago? I'm assuming you walked in via a VA loan so you may not have put much down. You overpaid that much? How did it appraise?  Also, with most lenders, especially through the VA, they won't let you overpay, nor will they approve something you clearly can't afford. How did all of this happen in this short amount of time?  As a fellow veteran myself, I know you are accustomed to harsh talk. Not trying to offend you, but I want you to learn and win. If you approach real estate seriously at this young age, if you make the right moves you will be wealthy down the line.

Taylor Dasch · Answer

I sold one at a loss, I personally wouldnt have done it if it were just me involved, but I had a PML and at this price I was able to get her the return I promised and I was able to take the hit ( about 15k). But if you are going to do something else with the money, you could possibly justify it, howver 30-40k is a lot and personally I would rent it out until I could be at least break even on it. However, you could be losing more $ by keeping the property while you could be doing something else with your time / money that will have a better return.

Dan H. · Answer

Thank you for your service.  If you “abhor” roommates, I am unsure that you will not abhor having tenants in your unit.  How are you finding the experience with you existing rental?   Residential RE is not passive.Typical MLS selling costs are between 7% and 10% in San Diego.  Occasionally properties fall outside this range, but the mass majority will be in this range.In general 2 br units are easier to sell and appreciate better than 1 BR or studios.  Assuming the $30k to $40k loss is accurate, you can absorb a lot of increased payment for that amount.So I would not sell the 2 br.   If you are ok being a landlord, I would rent the 2br and lease a studio or 1 BR unit.   If landlord is something that you do not like, I would live in the 2 br solo (luxurious) realizing it is costing a bit more each month but you saved up to &40k by not selling.   By the time the additional mortgage payment consumed the saved $40k, the unit likely appreciated enough that you will be glad you kept the unit.Good luck

Elealeh Fulmaran · Answer

Brendan, peace of mind matters, but make it a numbers-backed decision with options. Before eating a big loss, test two low-friction paths: try renting your 2/2 at full market with a solid PM and move into a 1/1 or studio lease for 6–12 months, or keep the 2/2 and refinance only if it meaningfully lowers payment. If selling still feels right, quantify the true all-in cost and how long a 1/1 would take to “earn back” that loss via lower monthly stress; if the breakeven is reasonable and your mental health improves, do it. Either way, set a clear “statement of purpose” for the next place so you’re not forced into roommates again. You’ve got this.

Basit Siddiqi · Answer

The price you paid is a sunk cost. It should be irrelevant in your decision making.What is most imporant is can you get a better return with your money after all fees to sell the house on another house(or other investment type).If you continue to get a negative return, I would prefer that money go elsewhere where it can make a positive return.

Mike Dymski · Answer

I recommend getting a new roommate.  Living alone is a luxury rather than peace of mind.

Henry Clark · Answer

OP show the numbers.

What is your BAH?   What is your all in cost on this property?  P/I, property tax, ins, elec?

can you STR the extra room,

How much longer are you stationed there?

After 2 years you should be able to sell at a loss, and still make money with your BAH.

Is it Ever Worth it to Sell at a Loss?

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