Sell my condo or re finance and rent?

Question

Hey all

Looking for some real estate advice and where better to start than the bigger pockets forums.

A few years ago (before i was wiser and looking into real estate properly) I bought an expensive condo in downtown Chicago. I now need to move to have space for my family and would love to house hack.

My mortgage rate is high at 5.5% and a new huge 10 yr development is potentially to be built right in front of my condo view of downtown.

I am now in a situation where I can sell the condo but will have to pay near 30-40k as the market is down. So all my savings.

Or refinance to a decent rate and rent the unit, but still have to cover near $700 a month, if I can rent the property with a potential 10 yr building site next door.

Any thoughts or advice would be greatly appreciated.

Lawrence Ajao · Answer

Thanks @KIran Kaur and @Shawn Regnier for your responses and advice.

My re Fi/ rent numbers were as follows.

New mortgage at 3.125%. Approx $1700 monthly payment + $500 HOA fees makes $2300 monthly.

Rent around this area for my condo size is approx $1800-$1900 a month.

If I include 1 month vacancy and $50 a month for repairs I got to around $700.

I agree and do not want to take that hit and the development isn’t 100%. Though the signs aren’t good.

I think I will see what offers come in and if not high enough, I’ll see what I could do to get high end of rent and hold out.

Thanks again for the response. Happy to hear any further thoughts.

KIran K. · Answer

@Lawrence Ajao

I personally wouldn’t take a 30-40k hit.

What rate are you being quoted for the refi?

Shawn Regnier · Answer

Hi @Lawrence Ajao, welcome to the forums.

The first thing that caught my eye is "10 yr development is potentially being built." There's nothing etched in stone there, at least.

You said after a re-fi, you'll still be under water $700/month.

1) are you sure about those numbers?

2) can you spruce up the place and get a higher rent?

3) I'm not sure about Chicago Airbnb laws, but is that an option for you?

Personally, I wouldn't want the $30-40k hit, and would explore every option to keep my condo. You get great tax benefits holding the property as an investment, and can wait for the market to bounce back in your area.

Good luck with what you decide.