Need Advice-Sell at a loss or Rent at a loss

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Need Advice-Sell at a loss or Rent at a loss

Charlene W.
Member since 2026 · 16 posts · 4 votes

I purchased a property in a class C area about 8 months ago. It has been completely redone with new roof, HVAC, flooring, appliances, etc.  Original plan was to live in it for a year and then move on but, due to personal reasons, needed to sell sooner. House is in the Atlanta area and has not had any offers in 2 months, even with an $8000 price drop. If I rent it out, I would only get enough to cover the mortgage, so it won't cash flow (per comps in the area). Other option is sell at a loss to a cash buyer and cut my losses. 

Any other recommendations? 

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Bruce WoodruffPro Member
Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
2mo

Not sure what the reasons are (that may matter?) but I would rather take the hit now and move on, rather than getting hit every single month, dragging on and on....that would just be more stress IMHO.

Good luck!

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  • Bruce WoodruffPro Member
    Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
    2mo

    Not sure what the reasons are (that may matter?) but I would rather take the hit now and move on, rather than getting hit every single month, dragging on and on....that would just be more stress IMHO.

    Good luck!

    4Reply
  • Charlene W.
    OP
    Member since 2026 · 16 posts · 4 votes
    2mo
    I became the legal custodian of an at risk individual that required a move for their services/safety.
    0Reply
  • Janice Carter
    Real Estate Broker · Atlanta · Member since 2024 · 1k+ posts · 607 votes
    2mo

    @Charlene W. With today's slower resale market, you may want to consider listing the property for sale and for rent at the same time, and even offering a rent to own option to expand your pool of potential buyers. You mentioned it hasn't received any offers in two months but how many showings have you had and what feedback have you received? Is it priced competitively based on current market conditions and is your agent using professional photos? If you share the listing link, I will be happy to offer my professional opinion.

    1Reply
    • Charlene W.
      OP
      Member since 2026 · 16 posts · 4 votes
      2mo

      @Janice Carter Thanks for the response. We've had 5 showings with good feedback (loved the upgrades, space, finishes, etc.). The agent did get professional photos, but I personally did not like the fact that they used AI to " upgrade them". I would be happy to share the listing link but prefer to do it privately. 

      0Reply
  • Charlene W.
    OP
    Member since 2026 · 16 posts · 4 votes
    2mo

    Thank you

    0Reply
  • Vijay FriedmanBusiness Member
    Miami, FL · Member since 2026 · 766 posts · 123 votes
    2mo
    Quote from @Charlene W.:

    I purchased a property in a class C area about 8 months ago. It has been completely redone with new roof, HVAC, flooring, appliances, etc.  Original plan was to live in it for a year and then move on but, due to personal reasons, needed to sell sooner. House is in the Atlanta area and has not had any offers in 2 months, even with an $8000 price drop. If I rent it out, I would only get enough to cover the mortgage, so it won't cash flow (per comps in the area). Other option is sell at a loss to a cash buyer and cut my losses. 

    Any other recommendations? 

    @Charlene W.
    That's a tough spot, but I'd avoid making the decision based only on today's market. I'd compare the total cost of holding the property for another year against the realized loss from selling today, while also considering your long-term goals and local market outlook. Sometimes the least painful option today isn't the best long-term financial decision.

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  • Chris SeveneyBusiness Member
    Moderator
    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    2mo
    My recommendation would be to cut your losses so you can spend your time and focus on assets or other things that will make you $
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  • Drew SygitBusiness Member
    Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
    2mo

    Which way do you want to potentially "bleed to death"?

    1) Drop the price 5% every 2 weeks
    - May have to bring cash to closing

    2) Rent out
    - Any nonpayment or expenses will come out of pocket
    - Also, the property will never look as good as it does today, once a tenant moves in.

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    2Reply
  • Henry Lazerow
    Real Estate Agent · Chicago, IL · Member since 2017 · 2k+ posts · 2k+ votes
    2mo

    Just rent it out. A small year 1 cashflow loss may still be a profitable total return when factor in appreciation and mortgage paydown. Even if area not growing right now, 5 years out inflation should of kicked in making rents higher and made that mortgage feel smaller in real dollars. 

    1Reply
  • Matthew Paul
    Severna Park, MD · Member since 2013 · 7k+ posts · 7k+ votes
    2mo

    Rent it and get the wrong tenant , that destroys the house and you will lose even more , if they dont pay rent its even worse .  

    Sell take the loss and move ahead 

    2Reply
  • Jules Aton
    MD/DC · Member since 2024 · 1k+ posts · 1k+ votes
    2mo

    I'm in the take your lumps now and sell camp especially since it is in a class C neighborhood. If you aren't familiar with Sunk Cost Fallacy look it up. Unfortunately I didn't heed it with a sizeable stock purchase and learned a costly lesson. 

    0Reply
  • Jimmy LieuBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2019 · 3k+ posts · 2k+ votes
    2mo
    Quote from @Charlene W.:

    I purchased a property in a class C area about 8 months ago. It has been completely redone with new roof, HVAC, flooring, appliances, etc.  Original plan was to live in it for a year and then move on but, due to personal reasons, needed to sell sooner. House is in the Atlanta area and has not had any offers in 2 months, even with an $8000 price drop. If I rent it out, I would only get enough to cover the mortgage, so it won't cash flow (per comps in the area). Other option is sell at a loss to a cash buyer and cut my losses. 

    Any other recommendations? 

    Great question, and sorry you're dealing with this. Before taking a loss to a cash buyer, I'd look at a few other options. First, make sure the issue is actually the price and not the presentation. If you've had plenty of showings but no offers, the market is probably telling you it's still priced too high. If showings are slow, it could be your listing photos, marketing, or even buyer financing in that area. I'd also run the numbers on renting it for a year or two. Breaking even isn't ideal, but it's often better than locking in a large loss today, especially if you're building equity through principal paydown and you think the market has room to recover. Another option is offering seller concessions or a rate buydown instead of another price cut, since that can attract more financed buyers without dropping your net as much. I wouldn't jump to a cash buyer unless you've compared what that immediate loss would be versus the cost of holding it for another 12-24 months. Sometimes the cheapest option is simply giving the property more time if you can comfortably afford it. Happy to connect and answer any questions you have!
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    0Reply
  • Stefano Sosa
    Contractor · Temecula, CA · Member since 2026 · 1 post · 0 votes
    2mo

    Have you considered turning it into a sober living home?

    0Reply
    • Charlene W.
      OP
      Member since 2026 · 16 posts · 4 votes
      2mo

      @Stefano Sosa I just heard about this yesterday. I don't know anything about these, but I can look into it

      0Reply
  • Marcus Auerbach
    Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes
    2mo

    Your $8000 price drop equals 40 months of neg $200 cash flow. Both rents and home values go up over time, at least with the rate of inflation. Year one break even is the new normal, so selling at a loss is NOT an obvious choice. But if you have zero experience renting, it may be the better one.

    Two additional options: furnished mid-term rental, yields more rent. Lease with option to purchase, also yields more money and you can set a purchase price that is slightly higher than todays fair market value.

    0Reply
    • Charlene W.
      OP
      Member since 2026 · 16 posts · 4 votes
      2mo

      @Marcus Auerbach Thanks. I have no experience renting, so this is a major concern for me. I thought about furnished mid-term rentals, but decided against it because it would require more money out-of-pocket to furnish the house, I figured the amount that I would be able to charge per room would not cover the mortgage due to the neighborhood.

      I will look into rent to own.

      0Reply
  • Colleen F.Pro Member
    Investor · Narragansett, RI · Member since 2013 · 8k+ posts · 4k+ votes
    2mo

    @Charlene W. a C class area rent to own might be a good idea but you have to pick the brain of people who have done it. I would think people with that mindset would want to take better care of the property. Keep in mind it is still renting. A regular tenant in this kind of area I would be especially picky because any tenant is going to be wear and tear, it won't be new anymore.  Also how much money can you afford if you have to bring money to the closing table. Do that math to see how much you can drop it to sell. If you have very little equity that could be a factor.  Good luck with the move and gaurdianship. 

    1Reply
  • Ken M.
    Investor · Get yourself trained before doing something inadvisable. · Member since 2024 · 3k+ posts · 1k+ votes
    2mo
    Quote from @Charlene W.:

    I purchased a property in a class C area about 8 months ago. It has been completely redone with new roof, HVAC, flooring, appliances, etc.  Original plan was to live in it for a year and then move on but, due to personal reasons, needed to sell sooner. House is in the Atlanta area and has not had any offers in 2 months, even with an $8000 price drop. If I rent it out, I would only get enough to cover the mortgage, so it won't cash flow (per comps in the area). Other option is sell at a loss to a cash buyer and cut my losses. 

    Any other recommendations? 

    Sell it on lease option at a projected price for the term of the option agreement 
    with 10% down. So, if it's for a 3 year term, project what it would be worth in three years at the historical inflation rate. You don't need real estate agents so you save 6% doing that.


    1Reply
  • Shiloh LundahlPro Member
    Rental Property Investor · Gilbert, AZ · Member since 2016 · 3k+ posts · 4k+ votes
    2mo
    I agree with Ken, do the lease option. But this is a strategy in and of itself so you’ll need to get proper documents for Georgia and you’ll need to vet your tenant buyer right. But this is an option that can turn a losing property into a winning property.
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  • Marcus Auerbach
    Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes
    2mo

    AI will tell you everything you need to know about rent to own. You are collecting a non-refundable deposit, maybe 5k or 10k up front, then monthly rent. You will need to sign two separate contracts: a normal lease and an option to purchase. Both are standard forms in your State. 

    The Option allows the tenant to execute and buy within a year and the option money will be credited towards the purchase price. You are no longer allowed to credit the rent back to them, only the security deposit. If they don't execute the option to purchase it expires and you keep the option money. Then you are left with the lease, if you choose so. 2/3s of tenants will not execute the option, but you can improve the odds if you coach them along to get their credit score ready.

    0Reply
    • Drew SygitBusiness Member
      Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
      2mo
      Quote from @Marcus Auerbach:

      AI will tell you everything you need to know about rent to own. You are collecting a non-refundable deposit, maybe 5k or 10k up front, then monthly rent. You will need to sign two separate contracts: a normal lease and an option to purchase. Both are standard forms in your State. 

      The Option allows the tenant to execute and buy within a year and the option money will be credited towards the purchase price. You are no longer allowed to credit the rent back to them, only the security deposit. If they don't execute the option to purchase it expires and you keep the option money. Then you are left with the lease, if you choose so. 2/3s of tenants will not execute the option, but you can improve the odds if you coach them along to get their credit score ready.


       Per our attorneys there should be 3 SEPARATE documents:

      1) Lease Contract
      2) Option Contract
      3) Purchase Contract

      You do NOT want to combine any of them because if you go to court, you only want judge to focus on the applicable contact and not look at the others!

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  • Andrew Carter
    Accountant · Houston Texas · Member since 2026 · 9 posts · 4 votes
    2mo

    Have you considered Seller financing? You can possibly sell to someone who might not qualify for a regular mortgage.  You might be able to become the bank and receive mortgage payments above your current mortgage.  Making a win win situation for everyone. 

    0Reply
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