Hi,
I could use some advice here, I purchased a new 3 bedroom 21/2 bath townhome back in December of 05 as a investment property, preconstruction price with all the extras ( gas fireplace stainless appliances etc. ) for $129,000. I mortgaged $109,000. The plan was to rent it out, hopefully break even or lose a little each month and then sell it within 5 years. Well, so far it has been vacant for over 3 months costing me close to $1000.00 a month. There are 2 similiar townhomes next to mine that are also vacant, maybe it’s a slow time of year who knows. My question is how long do I hang on, before putting it back on the market, my realtor thinks we can put it back on the market for $145,000 and still keep the option open to rent it. Fortunately right now I can afford to keep it vacant for a year or so if that were the case, not that I would be happy about it. Any opinions would be greatly appreciated.
Where is this property and what have you been doing to rent it? Is craigslist.org active in your area? Take lots of pictures and post them there. Also check out the going rents in your area. Taking a $100 a month hit is better than having it empty for a month or two. Also certain areas have different peak rental periods. Winters are usually the worst time to have a vacancy. Around here September 1st is when most leases start and also the best time to get the best rent. As it’s already April/May for your rental, you could just rent til September or do a year and half lease.
Also those extra’s may make it easier to rent, but you probably won’t get a big premium for them. Doesn’t matter how nice the apartment is, if the average tenant doesn’t make enough money, they can’t rent it if the price is too high. And if they do make enough money, then maybe they buy instead of rent.
You could market the property as a rent to own and that would open the door for an entirely different kind of tennant-an owner occupant. You would collect an initial non-refundable down payment (usually at least 3 percent of the property value), collect money for the monthlly mortgage, and still have your back end payday when the tenant gets the financing to purchase the house. This would give you upfront cash, cover the loan, and still be able to make money on your future equity.
Thanks for the replies, the property is in the Mountains of Western North Carolina about 20/25 minute drive from Downtown Asheville, from what I’m told the rent is not out of line and is actually $50.00 per month lower than the other 2 comparable units in the complex (also empty) in which one doesn’t have any of the upgrades. As far as advertising it, i have it with a Property Management CO and I also run a Ad on my own in the local weekly here where I’m told everyone looks to buy rent or sell anything in the area. I will look into Craigs list though. I’ve decided to let the realtor put it in the MLS and see what happens. It seems a shame though because I imagine that it would be a pretty good investment if I could rent it for a year or two. Oh well time will tell.