Should I sell or rent my condo?
BP community,
I’m having trouble deciding whether to rent my condo or sell it. I’m going to lay out all the numbers here and hopefully some people will chime in with their thoughts.
1 bed/ 1 bath condo in north New Jersey (~10 min bus ride to midtown Manhattan)
May 2016 Purchase price: $270k
Down payment: $54k (plus 10k in closing costs)
Current market value (best estimate): $325k
Mortgage remaining today: $205k
Cash flow per month as rental: $300
The way I am looking at this is I am deriving my “net equity” (net of selling closing costs) to be:
$325k x 94% = ~305k, less 205k (mortgage remaining) = $100k net equity.
Therefore, my RoE on an annual basis is $300 monthly cash flow x 12 = $3,600 divided by my net equity of $100k = 3.6%
On one hand, it seems like I could use that $100k elsewhere and likely beat 3.6%. On the other hand, the location of this property has seen very consistent appreciation and over the long-term is highly likely to continue going up in value at a higher rate than most other areas of the country.
What are your thoughts?