Should I sell for loss, or Refinance rental
I purchase a new property in 2007 for $186,000 to be used as a rental property from day 1. The property was initial rented for $1300. Hindsight is 20/20 and not good investment, but I'm trying to figure best way to exit this poor decision. Here are the numbers:
Market Value = $165,000
Current Loan Balance = $176,000
Current Rent = $1100
Tax/Ins = $3200 / yr
Property Mgmt = 10%
Yearly NOI = ~ $8500 (Rent - prop mgmt - tax - ins)
Current Mort Pay (PI)= $1050
Yearly Net = - $4,000 (negative cash flow per year)
OPTION 1 - Get a HARP refi at 4.378% (PI $900), and reduce yearly net to -$2500 ($1500 improvement, but still a loss)
OPTION 2 - Put on market and hopefully sell at market value = $165,000 (minus commission and mortgage, and closing costs). Negative -$20,000
Yes, market could improve, rents could go up, but both could go down as well.
Anybody see an Option 3?