Updated over 8 years ago on . Most recent reply
Does breaking even on rent make sense
Good morning! I currently own a rental property in Minneapolis. Single family, 3br 2 bth. Our current tenant is leaving at the end of the their lease. I am told by our current management company we could increase rent to where we would break even each month after taking out 5% each for vacancy, repairs, cap ex and $125 for mgmt. fees. We originally rented because we were upside down and left town for work. We still live out of state. I could sell and break even or net $2-3K after all realtor fees are paid from the sale.
Does this make sense to hold on to the property if we can break even? Or should we sell?
Any help is greatly appreciated.
Curran Quinlivan
Most Popular Reply
Is it really hurting you to hold onto it? Breaking even isn't a bad thing when leasing it out. You still get 3 of the 4 ways to make money in Real Estate. You won't get cash flow, but you'll get chance at appreciation, tax advantages and then you're paying down the mortgage.
I can imagine you've put some time into this house, so I don't believe selling the house would be worth it for 2-3k. Although, get a Realtor to walk through the house and see if there's anything you can do to force the appreciation. See if any updates can boost the sale of the house to make it worth it the sale.
Good luck!