I'm a newbie investor. I assumed a property in Cedar Park, TX and it has been under lease for the past year. However, my gut tells me it's not a good rental candidate for the area. It's a large house (2900 sq. ft.) and, thus, commands a higher price, i.e. not in the "sweet spot". Since the tenant didn't renew, I have been debating selling the property outright to invest in smaller, potentially more marketable properties; try to continue leasing; and/or do a cash-out refi to buy another property more in the "sweet spot" (which seems to be $1400-1600 rent).
I'm looking for a non-influenced opinion from someone in the area on this property. My property manager encourages me to lease (PM fees) and my realtor says I should sell (commission).
Ultimately, I'm looking for someone familiar with the area, but please let me know what additional information I can provide, or connect with me directly. As a newbie, I'm having a bit of a hard time with this decision.
Rental Property Investor · Cedar Park, TX · Member since 2017 · 59 posts · 51 votes
7y
Cedar Park is a hot market both for sales and rentals so neither is a bad choice. @Joe Niedert, what does "assumed a property" really mean? Ultimately it depends on if it is a good deal or not. Are you making $100/mo or $1000/mo after all costs are paid? If the rents are not covering the costs, then you are gambling on appreciation. Although a very safe bet right now in CP, is that what you want?
You also need to look at what you can get with the proceeds of the sale. Prices for everything are high so to sell and buy back in the same market doesn't give any gains unless you can find a great deal, and they are out there if you look. So if you are planning on a 1031 exchange, you should start looking before you sell to make sure you can get that rental in the sweet spot.
Thanks for the information! "Assumed" in this case means I owned the property jointly with another party (i.e. former spouse) and went through the assumption process to remove her from the mortgage and deed (the paperwork is similar to a refi, with fewer closing costs...and a bit of a lengthier process). I am making money on the property currently and would have some wiggle room with the rental rate and still be profitable. But excellent point on selling and buying back in the same market...I hadn't thought of that; and I definitely have a little more research to do with the exchange rules (another thing I hadn't thought of). But at least now I feel like I have a little better direction...and so much more to learn!