I have a few rental properties that after rehabbing, They usually cost me about $100,000 to 120,000. I then refinance them and am getting about 1500 a month. The current house in question is bigger (3 bedroom) and costing more.I purchased for 58,500 and when done, will be in around $180,000. My agent wants to list it at 254,900. I am hoping to walk away with $50.000 profit. Last night, my wife suggests refinancing it and getting most of our money back and net over $500 a month from the rental. Plus the tax benefits, principal pay down and hopefully more appreciation in 10 years time. Yada yada.. I maintain the properties myself. Everything is brand new, so should be easy to maintain. Any suggestions on best route forward? Thanks.
Depends on your forecast of future deals.
Chuck it up to refinancing, you're netting that $500/mo., and able to fund another rehab. If you do not need that excess capital, or foresee a scenario wherein the property would lose value... every day the capital sits, you take a long-term loss. Further, renting is just a 1 to 2 year commitment depending on the lease, you can rent it; and, if things start booming, list it.
Up to you either way, but I don't think holding and renting is a bad idea.