As far as Ryan and I are concerned, our minds have been made up! We are moving to Charlotte next year…or the year after…that part is yet to be determined. But, we are raring to be North Carolinians! Pay more taxes, pay more for gas, and pay to have our cars inspected every year. Geez, now that I think about it, why in the world are we willing to pay more? For the past three years of our relationship, the Queen City has been where we go out to dinner, where we attend events, and where we do a good bit of our shopping.
I can’t wait to share the home search experience with you all, but first the big thing that is irking us right now…okay, well me…is the decision to either sell the condo or rent it out. Sorry to include another plug for Money magazine but, investment properties seem to be the way to go these days. Home sales are getting back to where they used to be before the big 2008 crash, but what about the rest of the “non homeowners” who need a place to live? Renting out the condo would definitely bring back quite a great return.
Being a game lover though, I am going to let these two duke it out…boxing match style.
Being able to track sales in my neighborhood through Market Report, I am aware that there are about 3 condos in my complex alone that are up for sale. The rest of the condos are either owned or rented out, and they are picked up rather quickly. Renting seems the obvious route as far as this is concerned. Selling means competing against other sales and having to wait until our home search can really begin. Renting means instant gratification. Round One goes to RENT!
The main reason I decided to buy The Treehouse was to bring in some extra cash, either by selling it or renting. When I go to sell, my goal is to leave closing with some money in hand to use as a down payment for house #2.
The Home Sell Scenario: Again, going by the market report, the average market price is about $50,000. From the surface, it looks like I would be taking home about $15,000 at closing, quite the nest egg. But then, comparing it to actual sales, the sell price would be only $44,000, leaving me $9,000 to take home. Most buyers, however, will ask for closing costs, which could put me out an extra $4,000, netting me $5,000 to put towards our next home. Not bad, but just for kicks and giggles, let’s crunch numbers for renting.
The Home Rent Scenario: Our home payment plus HOA is around $350 (yes, we do have quite the deal). I spoke to my next door neighbor who rents out the same model condo for $650 a month. So, we are looking at about $300 extra coming in every month. Even if Ryan and I rented out the condo for only a year, we are looking of a gross profit of $3,600! Even with a quarter of it being stowed away for home repairs, that’s an extra $2,700 coming in and $225 off our second mortgage payment a month or putting that $225 into our savings!
When Ryan and I do decide to move to the “baby house,” our third home, we will have made an extra $13,500! And then the market will have come back some, allowing us to sell at a more desirable price.
ROUND Two Goes to RENT!
You know the phrase “save the drama for your mama?” I am not a fan of the crazy. I am just not! I have heard the horror stories frommy aforementioned neighbor…the tenants not paying the rent…lying about who is living there…lying about not having pets in the home. The absolute worst thing I heard, well, saw really was the total destrcution that was done to her condo after the first round of tenants left. Thousands of dollars worth of damage, and the security deposit was hardly going to cover that. How can you say “Keep your pimp hand strong!” and still be nice about it? That’s the real question. Do I have the tencity to be a landlord? I have been told many times that I am “too nice” and that I have a “bleeding heart.” This could seriously be a problem if I take on the responsiblity of making sure my bills get paid and on time, plus the bills of my tenants.
ROUND Three goes to SELL!
So, this is where I need your help. Have you been thinking about renting out your house/condo? Have you ever rented out and had a pleasant experience? Negative experience? What are some other factors Ryan and I should think about to make our decision?