Confused (Glendale: sale, foreclosures, rental)

[chunnus]

We have a rental house in Glendale.. As many of us did, we also did not sell the house in the prime time and now trying to renting it out. Any suggestions whether to rent it out or sell it for a huge loss.
The foreclosures around our house are just dragging my house value low....

Thanks
C

[Vinny536]

is the house losing real money out of your bank account, or just value compared to resales?

[chunnus]

I will be loosing hard earned REAL MONEY out of my bank

-C

Originally Posted by 61scout80

is the house losing real money out of your bank account, or just value compared to resales?

[Vinny536]

Originally Posted by chunnus

I will be loosing hard earned REAL MONEY out of my bank

-C

so, if its occupied paying for a good chunk of the mortgage why would you sell for a major loss?

lets say you lost $100k in current market value and your tenant pays all but $200.00 of the mortgage. it would take about 41 years to cost the loss if you sell now. but when the market turns around you could possibly lose a lot less. lets say that happens in ten years, and you have a steady stream of tenants paying all but $200 of the mortgage. you will have only invested an extra $24,000. you may even break even or make a little. spending $24k over 10 years sounds better than eating $100k right now.

The market is as bad for sellers right now as it was good for sellers a few years ago. if it were me i would wait until there was some sort of balance instead of having a fire sale and burn money.

investing is risky, unfortunately it seams everyone forgot that a few years ago. now we are all paying dearly for it.

[chunnus]

Thanks for your suggestions.. We lived in that house for 4 yrs and we moved to a bigger house and thought we could rent it out, but unfortunately, the tenants who wrote a 18 month lease, walked out without paying us 2 months rent and messing the house quite a bit... so we decided we will sell it... but we have double thoughts.. right now the house is vacant. So we are in a dilemma to sell it or rent it out.. I hope things work out and we get some good tenants..
Thanks once again..

-C

[amatrine]

I would suggest trying a property management company that does a good back ground check.

Ama

[Axiom]

It's difficult to give a personalized answer since we obviously don't have all your financial info, and I'm sure you don't want us to.

But in general the conventional wisdom (at least pre-bubble) has been NOT to count on price appreciation to decide whether a rental property makes sense or not. You really need to be cash flow positive... unless you know the value will rise so much that you will be able to sell at a substantial profit before things blow up in your face.

It sounds to me like you may be in a situation where you'd be holding on hoping to capture some future appreciation before the negative cash flow eats you alive. Very dangerous game IMO.

Good Luck with your decision

[markas214]

Originally Posted by chunnus

Thanks for your suggestions.. We lived in that house for 4 yrs and we moved to a bigger house and thought we could rent it out, but unfortunately, the tenants who wrote a 18 month lease, walked out without paying us 2 months rent and messing the house quite a bit... so we decided we will sell it... but we have double thoughts.. right now the house is vacant. So we are in a dilemma to sell it or rent it out.. I hope things work out and we get some good tenants..
Thanks once again..

-C

I'd price it low and bail. Chances are you'll be upside down another 10% in a year. Too many people waited when things started to tank and have been chasing the market down for a few years now. If you can afford the loss just get it over with. You've found how costly being a landlord is. Your tenants may cover all but a few hundred of the mortgage but when you price in normal expenses not to mention malicious ones you can see how it can cost you dearly.