House with POOL should I rent or sell

3 Replies

Currently own 2 properties, looking to buy another primary and unsure of the best route to go with on my current primary. Current primary residence is a 3 bedroom, 2 1/2 bath, 2 acre lot, with a fenced in, in-ground pool and 20x20 koi fish pond. My mortgage is a 2550SQ FT 15 year 2.75% rate with a payment of $1788 a month and just over $1000 a month going toward priceable balance with 12 years left of a balance of $185K. The property is currently valued around 300-350K (still need a official appraisal) in a desirable school district in Berkeley county WV along I-81 interstate with a population growth of 10.3% in 2017. I’m going to estimate I could rent the property between $1800-$2100. I’m debating on selling it and collection the profit, renting it for a few years and then selling it before my lived in primary residence 2out of 5 years Claus is out, or keeping it because of the low interest rate. The pool, pond and higher payment has me debating what is the best decision. Thanks in advance for your input. My plan is to collect as many rental properties as possible and become the monopoly man.

Phillip:

I have two rent properties with pools so am not afraid of that.  Check with your insurer on costs if you turn it into a rental.  Typically they do not like pools that have diving boards or slides and it must have a fence separating it from the house.

With the pools, my property manger strongly suggested we include pool maintenance to avoid it becoming a swamp.  I expect you would need to do that for your Koi Ponds as well.  It costs me about $150/ mo and I figure I get about half of that back in higher rent from the tenant, but on my end it ensures longer life for the pool and its equipment.

So, pool issues out of the way, the better question is does it make financial sense to rent.   With about $150K in equity you are only looking at about $200/mo in cash flow, giving you a 1.6% return on equity.  That isn't very strong.   With that $150K, you could go buy 4-6 cheaper rent properties and cash flow much higher, while also avoiding any concerns about the pool.   Personally, that is what I would do.

There are many issues with this property, including potentially negative cash flow due to a very low rent to value, that make this a very poor choice for a income investment property.

I would suggest that you sell. Renting will result in losing money, tenant neglect and damage to the property.