Updated about 9 years ago on . Most recent reply
Unique Property in Strong Market - Sell or Rent?
Hey everyone! I'm currently doing a live-in flip on a home south of Nashville in Spring Hill that has a few quirks. This was originally a barn built in the 1940 that was converted into a home in 1996 by a non-licensed handyman. Overall, he did a good job, but there are issues that will show up on an inspection that aren't necessarily liabilities. Grading slopes toward the house, all plumbing is glued together, breaker box has double tapped wires, drywall is shotty, septic didn't perk but he put one in anyway, etc...
My question is this: With a home like this that could sell quickly once I make a few more repairs, would it be better to sell it outright or hang onto it for a long term rental? My end goal is centered around buy-and-hold, but I'm afraid this one may be a long term liability. Has anyone been in a situation like this and what did you do?
For perspective, this home was valued at $40,000 when I bought it last month and I feel I can resell for $100,000 right now easily. In contrast, I posted it on Craigslist and had people lined up to rent it at $1,000/mo.
Most Popular Reply
The number you failed to mention was how much you have into it. If you own it free and clear, you have to make the decision as to where best to keep your money. Do you want 100k in a maintenance hog, or do you want to have 50% of a really nice 200k property, or 25% or two 200k properties.
The other piece of information you have to find is what returns you could get on your money if you bought something else. I spent almost a year getting my hands on a 4plex, there were several times that I thought it would be a pain and I should buy something else, but everything else I looked at made this a good deal. So now I'm stuck with a maintenance hog, but when I start to hate it, I just have to think back to why I bought it, and what else is out there.
So, what else is out there? I think that's the biggest question... and yes, you can find renters to live in a place that won't well, so a property like yours may not sell for market value, but it could rent for market value.