cats mom
DIS Veteran
- Joined
- Oct 25, 2000
- Messages
- 5,337
Are you cash flow positive on the property when using it as a rental? What about if you use a property manager?
With just one SFR to sign with a mgt company, around here you'd probably be looking at 12-15% of monthly rent, plus additional fees for advertising, turn-overs, etc. I don't know what the going rate is where you are though.
quick personal story:
We seriously considered holding onto our house when we relocated in 2007. Prices in our neighborhood had already dropped 20% from the peak even back then. Thankfully we ran the numbers very carefully, and since there was no way we could have been cash flow positive after paying a property manager, we took what we considered to be a huge hit on the sales price, and got out from under the place. Our house was fully HGTV ready, and we still sold for the 2nd lowest price per square foot in our neighborhood that calendar year. Arrg! At the time it made us sick to get so much less $$$ than neighbors had the previous few years. But that house is now down another 32% from our sales price. Yikes! So as it turned out, the price we got was quite a gift.
Full disclosure: we lived in a big time bubble market, and I wouldn't expect price declines like we saw most places.
That said, I'd still be very careful about holding onto a property that isn't cash flow positive hoping for future appreciation to make the numbers work.
Good Luck with your decision.
With just one SFR to sign with a mgt company, around here you'd probably be looking at 12-15% of monthly rent, plus additional fees for advertising, turn-overs, etc. I don't know what the going rate is where you are though.
quick personal story:
We seriously considered holding onto our house when we relocated in 2007. Prices in our neighborhood had already dropped 20% from the peak even back then. Thankfully we ran the numbers very carefully, and since there was no way we could have been cash flow positive after paying a property manager, we took what we considered to be a huge hit on the sales price, and got out from under the place. Our house was fully HGTV ready, and we still sold for the 2nd lowest price per square foot in our neighborhood that calendar year. Arrg! At the time it made us sick to get so much less $$$ than neighbors had the previous few years. But that house is now down another 32% from our sales price. Yikes! So as it turned out, the price we got was quite a gift.
Full disclosure: we lived in a big time bubble market, and I wouldn't expect price declines like we saw most places.
That said, I'd still be very careful about holding onto a property that isn't cash flow positive hoping for future appreciation to make the numbers work.
Good Luck with your decision.
