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Any input is appreciated.
Since July 2010, I have been renting out a house I own in suburban Houston. I bought it in March 2008 with the plan that I'd be living there for several years with my then-fiancee, but by November 2009 the relationship had ended badly and I got an offer to return to my previous job in my hometown of Columbus, Ohio.
The tenants are great; I've never had a problem with them. They moved to Houston for work and in fact are renting out their own property in their hometown in Mississippi. Their rent payment covers my mortgage every month, and I am usually able to add extra principal to my mortgage check.
My quandary is that I'm long past ready to sell the house and finally put that part of my life behind me forever. I would like this to be the year that I finally shed the darn thing. According to Trulia, the most recent assessment of my house is $113,020, and similar homes in the area have sold for $125,162. Because I've been paying extra principal, my balance now stands in the mid $112s and I plan to continue paying it down more.
Question is ... how quickly do I want to pull the trigger? I have good tenants and really don't want to get stuck paying the mortgage on an empty house if it doesn't sell right away. But I'm also tired of waiting for them to sell their property. They have expressed interest in buying the house once they are able.
When I was in Houston for a family wedding in November, my realtor said if I have good tenants, I'm in good shape. She also said the market has vastly improved, however.
Again, any input, stories of similar experiences, etc. are appreciated.
Ignore what Trulia says your house is worth. Also, pay no attention to what Zillow says about the Zestimate.
THESE ARE CRAP!
The data say: good time to sell
source = Department of Numbers
Acknowledge that it will cost you about 10% of the sale price to sell.
6% for real-estate commission
2% for getting it ready (repairs, paint, carpet, etc)
1% for paying the mortgage and having no tenants
1% for closing costs
Their rent payment covers my mortgage every month, and I am usually able to add extra principal to my mortgage check.
I would like this to be the year that I finally shed the darn thing.
Question is ... how quickly do I want to pull the trigger?
I have good tenants and really don't want to get stuck paying the mortgage on an empty house if it doesn't sell right away. But I'm also tired of waiting for them to sell their property.
They have expressed interest in buying the house once they are able.
When I was in Houston for a family wedding in November, my realtor said if I have good tenants, I'm in good shape. She also said the market has vastly improved, however.
Again, any input, stories of similar experiences, etc. are appreciated.
Sell it and move as as you have stated, I'm not sure why you need to over think it, but if you do, I'll add complication to your life.
Sell it with the tenants in there, any extra money you are paying towards principal, is making about 2-6% savings on borrowing less. If you make an extra payments of $10,000 a year, you are just saving 200-600 a year in savings and it is just tying up your cash.
Do the tenants have a lease, sell the place with the tenants in place. If you are covering the mortgage payment now an investor that will have to come in with 25% will be even more profitable.
The tenants aren't felling any pressure to buy the place, give them a deadline, but be very careful if you try to do a FSBO.
Figure out if you are going to have to pay any taxes on depreciation and make sure you aren't surprised at tax time.
The agent is right, you are good if they are coving everything , but you really want out of this property, so sell it and move on.
If you want to still have another real estate investment go buy another place which doesn't have as much bad blood and memories, although it is just purely psychological and may not make good business sense, but there is bad ju ju in this property.
If they are covering your mortgage and paying down principal, the principal paid and appreciation is your gains, your probably making around 3,000 a year in principal, if they are covering ALL of your other expenses with their mortgage payment.
Thanks to you both!
Dave: That's what I figured and have heard elsewhere, but just wanted to put that figure out there in case that site has more basis in merit than I believe.
Lopez2: I've been able to pay down roughly $3K extra per year in principal, and actually more when I was still living with my parents. My hesitance comes from if I say to plan to sell the house, throw people with whom I've had a good relationship out to find another property (I would give them plenty of advance notice), then get stuck paying for the damn thing and getting nothing back in case it doesn't sell fast.
I don't plan to buy a house for at least a few years after selling this one. No need to at this point in my life. I have an apartment that's the right size for me and am happy here!
Why do you need to thrown them out? If you tell them you are going to sell it , they might want to buy it, they'll save on the head ache and money on moving, etc. No need to sour the good relationship with the tenants, treat them with respect and hopefully you'll get it back. They might understand your need to sell. It might be easier to tell them that you'll have a real estate agent contact them of a evaluation of the house.
Resurrecting an old thread, the sale of the house finally closed back on the 6th. My realtor learned of some investors in her city who are buying houses with good tenants in the Houston area, and things started to move. Other than a few speedbumps involving repairs, things with pretty smoothly.
The sale did not truly hit me until I logged into my online account with the company that serviced my mortgage, and was told the account was closed. I feel like such a huge weight has been lifted off my shoulders.
I didn't make as much as I hoped from the sale, but it's a nice bump.
Thanks to the OP for coming back to post the result. Courtesy to be commended. Rarely does anyone asking for advice comes back when their problem is solved.
Thanks! I considered the advice in this thread, as well as my realtor, and decided to bide my time for the time being. One thing I didn't mention in my post is my realtor called me right after I got home from my grandmother's funeral back in March. The sappy side of me hopes she was pulling a few strings on this from elsewhere.
THere are costs associated with selling, best to keep the renters until you have an asset that you can walk away from and not owe a penny and break even.
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First of all
Rarely does anyone asking for advice comes back when their problem is solved.
