Should I buy and hold an 18k house or resale for 35k at FMV

14 Replies

I bought a 3 bed 1 bath for 18k through a private seller. The homes fair market value after minimal rehab would be around 35k. Should I hold it for a few years and rent it out or should I sell it immediately after rehab is done?

@Kurt Toth

Wow, that's a really low price point.  If it provides decent rent, which I'd like to think it will in this market (even in PA), I'd think you could do well with renting it then selling it later.  Your tax situation would certainly be better.

But, more importantly, what do you figure is the "sellability" of the property in a few years?  How well do you think it will hold its value?  Right now this is a good time to sell.  If you can't get rid of it in a few years easily then it may not make sense to hold on to it.  This also depends on your holding cost.

That is a great return.  If you did sell it, what could you buy with the money and how much would you make?  If you could use it as a down payment on two properties and get similar cash flow (eg $200 each vs $400 on the current one), I'd be tempted to sell it.

Originally posted by @Kurt Toth :

@Theresa Harris but wouldn’t that be double the risk if I’m making the same amount? If I’m now worrying abouttwo tenants two furnaces two hot water tanks etc? And my gain would be roughly 18k

You would also have rent coming in if one is vacant and at the end of the day, have two houses where the tenants are paying down your mortgage. If you took the $35K and used that as down payments for two, the houses would each be worth more than $35K.

 

@Kurt Toth should you go to college or go straight into working?

Im trying to get at, what is your long term goal, work back wards from there. What action today will help you get to that spot quicker?

Agree with @Steven Wilson , really depends on your long term goal. Personally I’d keep it, and sell when I need the case for a better opportunity to earn more like what was previously mentioned. Granted, you take on more work/stress/risk however you want to look at it, but that’s okay with me, may not be for you or others.

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