My first home that I've lived in for 7yrs+ is now up for sale or rent due to a job transfer way out of state.
I originally purchased it to be a rental as its a great location size etc. the #s look like:
Mortgage (P&I) $414 (awesomely low!!!!!)
Insurance/tax/hoa etc: $480
Market rent rates $1400 + or - $50
So a great cash flow of around $500ish
I purchased house for $100k and could sell it for around $155ish easily (have several offers). Neighborhood is 80-90's builds so it's def aging,but will remain a fairly solid neighborhood.
IF we sold it we would have around $70k in cash after fees etc. the new market we're moving to is very difficult to find a cash flow property that makes sense. (Alaska is tough). quad or triplex we've see doesn't make us $500 a month and the price is around $400k or more so very expensive compared to TX.
Should we keep the single family and landlord long distance OR sell it and take the cash?!?!?!?
Either way is a good option but we just can't decide and I could def use some advice, different perspective or what would you do and why
Thanks in advance
If you were to rent, would you and things over to a property mgmt company? That could eat into your profit also.
If those numbers are accurate and stay consistent, it would take you more than 11 and a half years to make 70K off rent. Obviously that if is a big word and there are so many factors, but to profit $500 a month for a couple years doesn't sound like such a bad idea. The market is on the verge of turning into a seller's market too, which will help drive up the price of your home. I'd keep it for a year or two and sell when the market is way up.
my company will pay for 1st years property management (since they're moving us) and we would put in under a property manager. We would still be involved in online marketing and email/phone screening on tenants.
If we sell within 3 yrs we don't have taxes BUT if we sold immediately we receive several bonus options from our company like they pay realtor and closing fees etc. this benefit adds quiet a bit in savings
Realtor fee = $9k ish. Saved
Closing fees = $2.5k ish saved
Bonus of 5% -= $7,750 profit added to sale of house
These benefits alone total almost $20k in cash in pocket & savings
If we sold we need to sell now! If we kept it would take us a little of 3yrs alone to make up the difference should we keep to rent.
If we kept the house we we prob hold long time bec in the next few years it'll need a new roof and new AC. So we would be in for around 10+ yrs
Is that too long? Or take the $ and run?
Prices are high now, but rents are high and you can still find good deals where you can cash flow $1000/month. I just bought one 3 months ago. Let me know if you have any questions.
I meant in Anchorage. I can't speak for the Valley (Wasilla and Palmer).
@Connor Maloney thanks and great to know there are properties out there. We want to house hack and def don't want to live in Mountain view. What area did you purchase in?
Are you worried about the market?!? We don't want to buy high and the market drop out and we're stuck with a high mortgage and low rent rates to keep with the market level. We definitely prefer to buy low sell high which is why I am entertaining selling this perfect Houston rental
I have two 4-plexes in East Anchorage which has been a great place to invest so far. It is probably in the middle of the road as far as pricing goes. Also the rents are in the middle of the road as well.
I also have a duplex on South Anchorage. It is more expensive there but the rents are usually higher.
I have house-hacked all of my properties. There is also a 5% down AHFC loan in AK for owner-occupied 1-2 unit houses. It would be a good one to use for a duplex after you buy a 4-plex. Also, if you buy something soon, you can take advantage of the AHFC Energy Rebate Program (ends next year sometime).
I would say that prices are too high (probably higher than they have ever been) to buy at market value. However if you can find one that is under market value and the numbers work out, I think it would be worth it. I feel like the market is at or close to the peak now. Also, with the oil price being down and considering that 90% of our state's income comes from oil royalties and taxes, I feel like housing prices are going to start dropping with people leaving the state with layoffs. However, there is a shortage of housing in Anchorage and even through the downturn in the 80's, rents still stayed high. Anyways, I have talked to a lot of people about this because I have been concerned about it, but after working in the oilfields for the last 5 years, Ithink that it will be slow for a while but we have a ton of oil and gas to develop up here so I see a long future up ahead for Alaska with oil and gas. These are all good questions. I wish I knew as much as you do when I started 3 years ago. So get out there and find a good deal to house hack!
I just wanted to point out you aren't really cash flowing $500/month on that. Your PITA is $950. With $1400 rent, you have $450 left, but you aren't account for maintenance (5% maybe), cap ex (10%), and vacancy (5%). Rough estimates would be 20% for those or $280/month. So you are really only getting $170/month cash flow. Now you said they pay property management for 1st year, but add property management and thats down to $30/month!
IMO with that extra $20k they are paying to move you I'd be VERY tempted to sell. If you net $200/month (which is a pretty good SFH rental IMO), it would take over 8 years just to break even with the 20k they are willing to pay! And you would have that equity to buy another house/rental/investment to make even more money.
Man, I wish my company would offer that to me! We are trying to sell our house and the market is flooded so we haven't had a single offer and its one of the nicest houses in a great neighborhood. We're going to rent it out, but have to pay everything ourselves.
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