Rent or Sell ? It is a tough question for me....

F

fcb2011

New member
I have a small home (1075 sqr feet) in Portla Springs. It is detached condo with 2 car garage. Living, Kitchen, 2Bed/1Bath up stair and 1 office/1Bath downstair. 
It directly faces the Grand Park and has very good view.  I wonder should I

1)sell it now
2)rent it out , wait for 2-3 years and then sell it out.

Which one is good for me? My monthly cost is around 2200$ ... The rent might be between 1900-2100.
Can anyone give me some good suggestions?


 
fcb2011 said:
I have a small home (1075 sqr feet) in Portla Springs. It is detached condo with 2 car garage. Living, Kitchen, 2Bed/1Bath up stair and 1 office/1Bath downstair. 
It directly faces the Grand Park and has very good view.  I wonder should I

1)sell it now
2)rent it out , wait for 2-3 years and then sell it out.

Which one is good for me? My monthly cost is around 2200$ ... The rent might be between 1900-2100.
Can anyone give me some good suggestions?
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Tough call.  I guess it would depend on your financial situation.  For example, if you sold...what would you do with the net sales proceeds?  Can your finances handle coming out of pocket $200 to $300 per month when it's rented and $2,200 per month when it's not rented?  Are you comfortable at the thought of being a landlord?  Could you hold on to the condo longer than 2-3 years?  Prices could be flat to down over the next few years. 
 
Liar Loan said:
If you have a negative cashflow before accounting for vacancy & upkeep, I would sell.
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Unless he has a 10 or 15 year fixed loan or a higher interest 30 year fixed loan than he can refinance into a lower rate. 
 
wow.  my first question is 1900-2100 for a 1075 sq ft condo?  is that the going rate?

if you can get that, then yeah its a tougher call...  id have to ask a lot of questions to really have an opinion.  how much do you owe (if anything)?  what is the purpose of the transaction?  what's the overall effect of renting/selling on your cash flow? 

at the root of it all, there is an easy answer to it all...  how long would you keep the place.  based on the estimated time of holding the property, what are your base/ opt/ pess scenarios for r of the property.  if your base case is 2% annual appreciation, do the math.  negative may be -6% annual, and positive may be +5% annual (pick your own numbers).    see what the numbers look like, think about what you think are the most probable outcomes.  then you have make a decision for yourself as to what is best for you. 
 
akim997 said:
wow.  my first question is 1900-2100 for a 1075 sq ft condo?  is that the going rate?

if you can get that, then yeah its a tougher call...  id have to ask a lot of questions to really have an opinion.  how much do you owe (if anything)?  what is the purpose of the transaction?  what's the overall effect of renting/selling on your cash flow? 

at the root of it all, there is an easy answer to it all...  how long would you keep the place.  based on the estimated time of holding the property, what are your base/ opt/ pess scenarios for r of the property.  if your base case is 2% annual appreciation, do the math.  negative may be -6% annual, and positive may be +5% annual (pick your own numbers).    see what the numbers look like, think about what you think are the most probable outcomes.  then you have make a decision for yourself as to what is best for you.  
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QFT
 
USCTrojanCPA said:
Liar Loan said:
If you have a negative cashflow before accounting for vacancy & upkeep, I would sell.
Click to expand...
Unless he has a 10 or 15 year fixed loan or a higher interest 30 year fixed loan than he can refinance into a lower rate.
Click to expand...

I thought of that as well, but even if that is an option, the best case is that it brings him slightly positive cashflow before including vacancy and upkeep.  From an investment perspective, I don't think this is compelling.  One month of vacancy or a broken water heater makes this thing a loser. 

He's going to need 1.5-2% appreciation per year to break even, assuming no refinance.  So he'll need greater than 2% appreciation to get any return.  That makes this pretty speculative.  With that area being higher end, it could easily drop in value.
 
Renting, you will take a loss, every month, literally bleeding money in a market that is, according to most indicators, heading downward for a while.

Selling is a different question. If you bought this home at a steep discount, you may have room to hold on for a housing recovery possibly in 2013-2014. But I'm going to go ahead and guess you bought within the past 5-7 years and are you probably just breaking even if not a bit under. You might be able to unload it right now if you don't want to keep losing equity every year. I don't know.

 
fcb2011 said:
I have a small home (1075 sqr feet) in Portla Springs. It is detached condo with 2 car garage. Living, Kitchen, 2Bed/1Bath up stair and 1 office/1Bath downstair. 
It directly faces the Grand Park and has very good view.  I wonder should I

1)sell it now
2)rent it out , wait for 2-3 years and then sell it out.

Which one is good for me? My monthly cost is around 2200$ ... The rent might be between 1900-2100.
Can anyone give me some good suggestions?
Click to expand...

Your name is fcb yet your monthly cost is 2200. I'm so confused.
 
Your Vientos plan 2 may have a tough time competing with Woodbury Place. When 2 bedrooms share a bath that limits your pool of renters such as roomates. Newly weds may rent from you but what are they going to do with the spare bedroom or the office lounge downstairs? I guess they can turn the spare bedroom into an office.

This scenario sounds the best: Target the single or divorced parents with a partime child or teenage kid to sleep in the second bedroom then use the lounge as the teenagers living room where he or she will  not fight over the parent's TV upstairs. Even at best conflict over a single bathroom may be an issue because kids are messy with the bathroom. If the kid spend limited time there then the parent may tolerate it for a shorter duration. Good Luck!

 
Vientos Plan 2? Weren't those selling in the mid-400s back during the bubble?

If that's the case, there is no way you can be cash positive for a long time when you include HOA and taxes.
 
irvinehomeshopper said:
FCB put quite a bit of downpayment but not enough to pay off the entire house. That was why MOU was confused with FCB with a mortgage.
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I haven't done the numbers on a calculator, but from my head, $2,200 monthly cost would indicate to me that the down payment wasn't that substantial on a home originally purchased in the mid-400s. Probably close to 20% actually.
 
I bought it 2 years ago around 380k and my mortage is 2.875%. Also PS lowed HOA to 248 and MR is also lowed to 3400.  That's why my monthly cost is around 2200.

IndieDev said:
Vientos Plan 2? Weren't those selling in the mid-400s back during the bubble?

If that's the case, there is no way you can be cash positive for a long time when you include HOA and taxes.
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Actually it is good for a young family especially the downstair room as office... and also there's a full bath downstairs.

irvinehomeshopper said:
Your Vientos plan 2 may have a tough time competing with Woodbury Place. When 2 bedrooms share a bath that limits your pool of renters such as roomates. Newly weds may rent from you but what are they going to do with the spare bedroom or the office lounge downstairs? I guess they can turn the spare bedroom into an office.

This scenario sounds the best: Target the single or divorced parents with a partime child or teenage kid to sleep in the second bedroom then use the lounge as the teenagers living room where he or she will  not fight over the parent's TV upstairs. Even at best conflict over a single bathroom may be an issue because kids are messy with the bathroom. If the kid spend limited time there then the parent may tolerate it for a shorter duration. Good Luck!
Click to expand...
 
It's a detached condo with attached 2 car garage. A 1000sqr feet 2b2B apartment with one car garage rent is around 1900-2100 nearby (Portola Place)
A 2B2B apartment rate is usually 1600-2100 by the Irvine Company depending on location, garage and washer/dryer available or not.

akim997 said:
wow.  my first question is 1900-2100 for a 1075 sq ft condo?  is that the going rate?

if you can get that, then yeah its a tougher call...  id have to ask a lot of questions to really have an opinion.  how much do you owe (if anything)?  what is the purpose of the transaction?  what's the overall effect of renting/selling on your cash flow? 

at the root of it all, there is an easy answer to it all...  how long would you keep the place.  based on the estimated time of holding the property, what are your base/ opt/ pess scenarios for r of the property.  if your base case is 2% annual appreciation, do the math.  negative may be -6% annual, and positive may be +5% annual (pick your own numbers).    see what the numbers look like, think about what you think are the most probable outcomes.  then you have make a decision for yourself as to what is best for you.
Click to expand...
 
Bedroom is on the second floor but the full bath is downstairs with no bedroom down. The occupant of the second bedroom has to use a bathroom not on the same level?

fcb2011 said:
Actually it is good for a young family especially the downstair room as office... and also there's a full bath downstairs.

irvinehomeshopper said:
Your Vientos plan 2 may have a tough time competing with Woodbury Place. When 2 bedrooms share a bath that limits your pool of renters such as roomates. Newly weds may rent from you but what are they going to do with the spare bedroom or the office lounge downstairs? I guess they can turn the spare bedroom into an office.

This scenario sounds the best: Target the single or divorced parents with a partime child or teenage kid to sleep in the second bedroom then use the lounge as the teenagers living room where he or she will  not fight over the parent's TV upstairs. Even at best conflict over a single bathroom may be an issue because kids are messy with the bathroom. If the kid spend limited time there then the parent may tolerate it for a shorter duration. Good Luck!
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PoorFCB is not even possible in the same word. It is like Asians with "D" grades or Asians hate Irvine or IHO hate 3CWG. Those 2 words automatically reject each other.

fcb2011 said:
Hey, the ID FCB is just for fun .... maybe I should change to poorFCB..

irvinehomeshopper said:
Then he is a really poor FCB but a very honest Chinese government official.
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