Andover, MN · Member since 2016 · 3 posts · 2 votes
Hi everyone, I'm new to BP but wanted to bounce my next move off of the wealth of knowledge here on the forums.
Right now I have a townhouse in the zipcode 55303 in MN. My mortgage has $63,000 left. I bought it in a shortsale for $89,000 a few years ago. The house is currently rented out for $1,000/mo, which is slightly less than average for the area, but it is located on the corner of a very noisy road, so I'm okay with pricing it lower to get renters. The current renters lease is coming up in June. I have no property management company at the moment. It cash flows $300/mo after all expenses paid (roughly $3,600/year pre tax). I have not refinanced the mortgage. Comps in the area have sold for $155,000 in the last 6 months.
My question is whether I should flip it, take the profits and reinvest in another property, possibly buying a home at auction with the cash; or should I keep renting it out and look for long-term appreciation and hopefully pay off the mortgage?
I would love to get the groups thought process for knowing what to flip and what to hold.
Investor · Tel Aviv, Israel · Member since 2016 · 14 posts · 3 votes
10y
of course it is all about your goals, but it looks like you enjoy the appreciation and also a bit of cash flow.. if I were you.. i would sell it and keep moving to my next investment !
Realtor · Nolensville, TN · Member since 2016 · 94 posts · 29 votes
10y
I have the same situation. Different numbers though. Mine cash flows about 400 a month. While we only owe 126k, my wife bought it for 179k. We could sell it now for 205k. It wasn't originally meant to be a rental, we lived there for a few years. Anyways, I agree with Ido that it depends on your goals. That's what I'm fighting with. Do I take the cash and try to do more profitable things with it or keep it bc it's a great property, easy to rent and high quality renters? I take all these things in consideration. Is the property hassle free for you? Do you think the area will continue to grow providing more appreciation? For your next investment, do you have the means to go for it or are you stuck unless you sell and get the equity out? Also, something to think about, if you have about 92k in equity, what about using it for a HELOC or home equity loan. I haven't personally done this but have thought that might be a good route to go if I need cash for the next investment.
Realtor · Nolensville, TN · Member since 2016 · 94 posts · 29 votes
10y
Ryan, how do you feel about townhouses as buy and hold properties? I know there is a risk bc of the HOA but most neighborhoods I find have HOAs, townhouses or not. I have two and love it so far. I like not having to worry about the exterior of the building, landscaping etc. as the HOA does that.