Alabama House
Hi all,
We'd love your input and advice on what to do in our situation. We currently own and rent out a small townhouse in AL (close to military base). We originally bought this house when we lived there (thinking it would be a great investment), so of course we paid full retail on it. It worked out okay for the first two years we had it rented out - we cash flowed about $200/month after PITI, management expenses and home warranty. Now the market demands a lower rent, effectively reducing our CF to a whopping $30/month. Since there is a high demand in rentals (it's a military training base) and a high turnover, it was rented out again as soon as the last tenant moved in. Because we paid full retail for the house, and the fair market value went down we are now a little under water.
Original purchase price was $91K,
current mortgage is $86K, 4.65%
FMV $84K
Income $750/month ($550 mortgage, $75 management fee, $50 home warranty, $45 HOA fee)
What would you guys suggest?
Option A: Keep the house, rent and hope for market values to rise.
Option B: Sell using owner financing (which we don't know much about yet). Not sure if this can be done with a mortgage on the property.
Option C: Sell via Lease Option
Option D: Any other creative option that we haven't mentioned!
Thanks in advance!!