Should I Sell or continue to Rent?

17 Replies

Here is my dilemma. I have a rental with a lease that is expiring in November. I am expecting to make 175 cash a month with next lease and with principal reduction, would be about 600 a month total. I have some repairs coming up, replacing carpet for roughly 3k, potential pool plaster replacement for 5k and potential roof replacement at 10k (house is 22 yrs old). I stand to make roughly 15k or so after all realtor fees and closing fees if I sold it. My question to you is, what would you do knowing all of that? 

@Dave Kuether I would continue to rent. If the property is cash flowing hold on to it. 15K is not much in the grand scheme of things. Also, a big factor is your market. How far will 15K go in your market? Will it be able to produce another property within a month or so? Lets say you do sell and get 15K will you be able to find a house with NO repairs? Just spit balling bro im new and just giving an opinion.

Originally posted by @Anthony W. :

@Dave Kuether I would continue to rent. If the property is cash flowing hold on to it. 15K is not much in the grand scheme of things. Also, a big factor is your market. How far will 15K go in your market? Will it be able to produce another property within a month or so? Lets say you do sell and get 15K will you be able to find a house with NO repairs? Just spit balling bro im new and just giving an opinion.

I really appreciate your response! Thanks. You make some great points. 

 

Ask yourself what is your goal for the rental property you currently have and what is your exit strategy? If the goal of the investment is being met then continue with the investment. If you do not have a goal, put some thought to making a goal and also how and when to exit from the investment. Me personally with the info you gave, I would lean to keep renting it out if you plan on keeping the rental for the long term. Otherwise you could take the 15K from the sale + 18K you would have spent on repairs and look for and new investment that is going to meet your goals. If you don't have 18K in your pocket or you would need to borrow money for the repairs, then that might change my decision a bit. Prioritize what needs to be done at the turn (carpet), and what can wait a bit longer (pool and roof) to spread out maintenance cost.

Originally posted by @Michael Ablan :

@Dave Kuether -  How much are they appreciating?  What is your home valued now, and what will it be valued at next year based on your markets current appreciation %?

Home value is around 320k. If things keep going, could easily see 3 to 5% or more appreciation in next year in Gilbert AZ. Lot of articles pointing towards a downturn in the media but as long as jobs are solid, which they are, I feel like the market won't reverse, at least to a point where we were at in 2008. 

 

Originally posted by @Mathew Spray :

Ask yourself what is your goal for the rental property you currently have and what is your exit strategy? If the goal of the investment is being met then continue with the investment. If you do not have a goal, put some thought to making a goal and also how and when to exit from the investment. Me personally with the info you gave, I would lean to keep renting it out if you plan on keeping the rental for the long term. Otherwise you could take the 15K from the sale + 18K you would have spent on repairs and look for and new investment that is going to meet your goals. If you don't have 18K in your pocket or you would need to borrow money for the repairs, then that might change my decision a bit. Prioritize what needs to be done at the turn (carpet), and what can wait a bit longer (pool and roof) to spread out maintenance cost.

 Yes you are spot on with what you are speaking to. My original goal was to have this as a nest egg into retirement. However the upcoming repairs concerned me. I currently have maybe half of that liquid right now to pay for and that's dependant on nothing else happening with the renter situation or more costly repairs. Carpet is a must, the rest can be kicked down the road a bit but I don't think I have more than 5 years there. 

@Dave Kuether - I'd probably keep it in your shoes.  You'll essentially get a rebate for the work you do it by just holding it for an additional year. Plus, you get to keep a highly sought after asset that you can eventually leverage to buy more deals down the road.

@Dave Kuether   I would hold on to it if the numbers are what you say.  With the carpet replacement, have you considered going with something that is less upkeep? 

While the repair costs will add up, if you sell the buyer is likely to pay less because those things are likely to be mentioned by an inspector assuming the buyer doesn't notice them.  Use it as an opportunity to improve the property which will add value when you do eventually sell it.

Originally posted by @Theresa Harris :

@Dave Kuether  I would hold on to it if the numbers are what you say.  With the carpet replacement, have you considered going with something that is less upkeep? 

While the repair costs will add up, if you sell the buyer is likely to pay less because those things are likely to be mentioned by an inspector assuming the buyer doesn't notice them.  Use it as an opportunity to improve the property which will add value when you do eventually sell it.

 Are you referring to tile, etc?  

great points on the other repairs. I appreciate your insight!


Originally posted by @Dustin P. :

I would keep renting it, I don't think you'll see any slowdown in Gilbert anytime soon

 Appreciate this, the market is always a bit hard to judge but you are closer to it than I am being a realtor so I appreciate that. 

Originally posted by @Dave Kuether :
Originally posted by @Theresa Harris:

@Dave Kuether  I would hold on to it if the numbers are what you say.  With the carpet replacement, have you considered going with something that is less upkeep? 

While the repair costs will add up, if you sell the buyer is likely to pay less because those things are likely to be mentioned by an inspector assuming the buyer doesn't notice them.  Use it as an opportunity to improve the property which will add value when you do eventually sell it.

 Are you referring to tile, etc?  

great points on the other repairs. I appreciate your insight!

I would do a vinyl plank or similar.  With tile if someone drops something and breaks a tile, it could get expensive to replace (even if you keep extras). 

Originally posted by @Theresa Harris :
Originally posted by @Dave Kuether:
Originally posted by @Theresa Harris:

@Dave Kuether  I would hold on to it if the numbers are what you say.  With the carpet replacement, have you considered going with something that is less upkeep? 

While the repair costs will add up, if you sell the buyer is likely to pay less because those things are likely to be mentioned by an inspector assuming the buyer doesn't notice them.  Use it as an opportunity to improve the property which will add value when you do eventually sell it.

 Are you referring to tile, etc?  

great points on the other repairs. I appreciate your insight!

I would do a vinyl plank or similar.  With tile if someone drops something and breaks a tile, it could get expensive to replace (even if you keep extras). 

Wow I went and checked out vinyl planks last night. Incredible stuff and I could even install myself saving $$$. Thank you for suggesting this!

 

Originally posted by @Dave Kuether :
Originally posted by @Theresa Harris:
Originally posted by @Dave Kuether:
Originally posted by @Theresa Harris:

@Dave Kuether  I would hold on to it if the numbers are what you say.  With the carpet replacement, have you considered going with something that is less upkeep? 

While the repair costs will add up, if you sell the buyer is likely to pay less because those things are likely to be mentioned by an inspector assuming the buyer doesn't notice them.  Use it as an opportunity to improve the property which will add value when you do eventually sell it.

 Are you referring to tile, etc?  

great points on the other repairs. I appreciate your insight!

I would do a vinyl plank or similar.  With tile if someone drops something and breaks a tile, it could get expensive to replace (even if you keep extras). 

Wow I went and checked out vinyl planks last night. Incredible stuff and I could even install myself saving $$$. Thank you for suggesting this!

 

Even better :)

 

Originally posted by @Dave Kuether :
Originally posted by @Theresa Harris:
Originally posted by @Dave Kuether:
Originally posted by @Theresa Harris:

@Dave Kuether  I would hold on to it if the numbers are what you say.  With the carpet replacement, have you considered going with something that is less upkeep? 

While the repair costs will add up, if you sell the buyer is likely to pay less because those things are likely to be mentioned by an inspector assuming the buyer doesn't notice them.  Use it as an opportunity to improve the property which will add value when you do eventually sell it.

 Are you referring to tile, etc?  

great points on the other repairs. I appreciate your insight!

I would do a vinyl plank or similar.  With tile if someone drops something and breaks a tile, it could get expensive to replace (even if you keep extras). 

Wow I went and checked out vinyl planks last night. Incredible stuff and I could even install myself saving $$$. Thank you for suggesting this!

 

 I love vinyl plank. Just installed it in my house and IMO it looks better than tile and it has more give, plus cheaper to install