Bought to rehab, now uncertain...
Hi
Ive been reading around here a bit, but not a lot of posting...and now I have a question/story.
A few months ago, I bought a small 2B/1B home in a senior area. It was a good deal at the time because it was in poor shape. Great senior only neighborhood, the worst house on the block.
Bought for $143k. I did the rehab/additions myself, and it took me a few months. I fixed it up pretty nice, pergo floors, 100% new kitchen, new carpets, but nothing overly fancy. It shows very well, only downside is 1 bath. The only bummer is that if I rent it out, the value of these nice things I added will fall pretty quickly. Going on comps, at the time I bought I figured that I would be able to get $190k or so for it. I put more into it than I had planned/thought, now at about 160k. Also in order to avoid the time costs and fees of a loan, I bought it outright with cash.
I have had it on the MLS and other papers for a few weeks with no calls, so I began to lower the price. I had quite a few lookers and an offer for $165k that I rejected. The price has been at 179k for 2 weeks now with no calls. This is disappointing, but I did not think this senior area would be as affected by the general housing slump as it has been. There is just a lot of inventory in the area, and things are slow to move.
So I am starting to think that renting it out might be a better idea.....no real point in selling it for less than $10k profit. Rents in the area are running about $900/mo. I would consider getting a mortgage on the house after it is rented out in order to free up the equity for other projects...but it wont be a positive cash flow.
My long term goal here is basically to rent it out for another few years until the market rebounds and then do a quick clean up on it and then sell. Im not familiar with dealing with tenants, but I am local, handy, and ready to learn. Also it seems like a 55+ neighborhood would be a pretty good place to learn how to be a landlord.....no?
Just looking for some general opinions.
Thanks.