Join the Meeting Place for Moms!
Talk to other moms, share advice, and have fun!

(minimum 6 characters)

Thinking about renting out our condo and need advice...

Posted by on Apr. 8, 2009 at 10:35 PM
  • 2 Replies
  • 332 Total Views

My husband and I have a 3 bedroom, 2 bath condo in our city (population 35,000). I will finish my degree next year and we are thinking about keeping the condo but renting it out while we buy a house. Our condo is worth $85,000 and we owe about $65, 000 as of today's date. Our mortgage, escrow, and condo fees are about $600 each month. If we rent it then we will rent it out for about $650-$750 each month. We plan to have a years worth of mortgage payments in savings in case we can't rent it or have to evict someone out. Do you think it is worth doing this? Or should we just try to sell it? Both my parents and my husband's parents have rental property so we kind of know first hand how things work but I wanted to get some second opinions. Thanks in advance!

by on Apr. 8, 2009 at 10:35 PM
Add your quick reply below:
You must be a member to reply to this post.
Replies (1-2):
tenacity
by Member on Apr. 9, 2009 at 9:58 AM


Quoting JeremysMom:

My husband and I have a 3 bedroom, 2 bath condo in our city (population 35,000). I will finish my degree next year and we are thinking about keeping the condo but renting it out while we buy a house. Our condo is worth $85,000 and we owe about $65, 000 as of today's date. Our mortgage, escrow, and condo fees are about $600 each month. If we rent it then we will rent it out for about $650-$750 each month. We plan to have a years worth of mortgage payments in savings in case we can't rent it or have to evict someone out. Do you think it is worth doing this? Or should we just try to sell it? Both my parents and my husband's parents have rental property so we kind of know first hand how things work but I wanted to get some second opinions. Thanks in advance!

Well, the first item worth looking at is WHY?  R U looking to make money? Emotional reasons? Bad market? Good investment?

Why do you want to hold on to it?  From the costs you already incur, profit can't be a motive.  

upon the purchase of your new residence, along with actually renting the first home, it will change the hazard insurance to the landlord side, thus more expense, which, if your numbers are correct will border you losing money each month and then losing even more money each time you have to find a new renter. I don't even have to mention the monthly maintenance expense since you are familiar (thru ur family) about renting to people.

It will also have a bearing on how much money you will qualify when buying the new house.

So, if it were me and I looked at the numbers my first reaction would be absolutely not. Don't keep the condo.

But, if there are underlying reasons, such as, you know that your city is building up that neighborhood within a year and you'll be able to increase your rents to ($900 or more) Then, it might be a wise investment. 

OR you want to take a chance & hold onto to it waiting for a better market. <--I wouldn't do this for very long (unless ur psychic) :-)

 But, as it stands, it appears to a be a detriment to your life/overall financial picture.


 

Mary Wilcox
Reece & Nichols Realtor
Kansas City Metro Area
816.407.5284
JeremysMom
by on Apr. 9, 2009 at 10:13 AM

I guess the reason we considered keeping it is because we would like to have our own rental property. But I guess you are right about losing money each month. It would be several years before we saw any profit. I guess we will sell the condo and then save money to buy rental property later on. Thanks.

Add your quick reply below:
You must be a member to reply to this post.
Join the Meeting Place for Moms!
Talk to other moms, share advice, and have fun!

(minimum 6 characters)