Should I keep my single house or sell it for tri or four-plex?

8 Replies

I have a rental that my tenant pays $1100 a month and pays for all utilities including HOA of $280 a year. My mortgage is $1710 PITI. I am pretty confident I'll be able to sell it for $195k and I owe $23k. House is 20 years old so I'm going to have to redo the stucco and roof in next couple of years. I'll have my loan paid off by Dec of 2019. Should I sell it now since the market is doing well and look into tri or four-flex? I am looking forward to everyone's advise. Thank you!

Originally posted by @Toshiki Hoshino :

I have a rental that my tenant pays $1100 a month and pays for all utilities including HOA of $280 a year. My mortgage is $1710 PITI. I am pretty confident I'll be able to sell it for $195k and I owe $23k. House is 20 years old so I'm going to have to redo the stucco and roof in next couple of years. I'll have my loan paid off by Dec of 2019. Should I sell it now since the market is doing well and look into tri or four-flex? I am looking forward to everyone's advise. Thank you!

$1380 < $1710

Answer: Yes.

What is market rate on rent? That's a large difference between rent and PITI for a $200k home.

If you only owe $23k, you could have HELOC'd by now or cash-out/refi'd way down. Why is it $1710 to begin with? Your mortgage rate would have to be through the roof.

@Toshiki Hoshino , if you've had it since new, it looks like its negative cash flow has cost you towards $100k over that time, not including your original deposit?

I agree with Aaron: sell! (It'd probably suit an owner-occupier rather than an Investor).

If its return on market value doesn't gross much more than 0.5%/m, I reckon it's not a good candidate for refinancing. Good thinking about "the market is doing well and look into tri or four-flex". Welcome to BP. All the best...

Market rent is around $1200.  I used to live in this house originally and had 30yr note.  After 5yrs I refi to 15yrs and my rate is 4.25%.  I have been paying for 12yrs and also had a tenant from when I bought it.  I have a friend of mine living there and that is why the rent is below the market value.  

This is a ridiculous question that no one can answer but you.  Sure you might make more money with a 3 or 4 unit, but’s it’s also more work.  What are your goals?  Answer that question yourself and then make your move.  Also consider tax implications and if you could possibly identify a multi in time to do a 1031.

Originally posted by @Toshiki Hoshino :

Market rent is around $1200.  I used to live in this house originally and had 30yr note.  After 5yrs I refi to 15yrs and my rate is 4.25%.  I have been paying for 12yrs and also had a tenant from when I bought it.  I have a friend of mine living there and that is why the rent is below the market value.  

Sell or make new friends.

You can achieve potentially higher returns by investing with others in multi-family residential projects. That is what my firm helps investors do. If you have any additional questions, send me a message. I am more than happy to assist.