I have just recently married. Both my husband and I have townhomes. His is larger than mine so I will be moving in with him. We are currently trying to decide if I should rent or sell my townhome. We want to move into a single family in another year so if I sold mine, we were going to put that money towards a new home. However, some people have told me that renting would be a good idea as well. Now I am just confused. Any suggestions?
2006-09-27 18:36:37 · 9 answers · asked by sunny02 1 in Business & Finance ➔ Renting & Real Estate
you should always hang onto property if you can possibly afford it. Renting is a great idea if you don't absolutely need the cash that the place represents to buy your next home.
Property = Wealth it sounds like you have a good thing! Congratulations!
2006-09-27 18:44:05 · answer #1 · answered by Anonymous · 0⤊ 0⤋
Right now we are in a buyer's market...so rent it out! It's better to keep the property as a rental (so long as the rent covers your mortgage payment). When the time comes to purchase your house, you could always refinance your property to take the equity out of your townhome so you can apply it to your new purchase. (This could be beneficial if your husband does the same with his home, as you could get enough from both townhouses to make a bigger downpayment!)
I am advising my clients to hold on to their properties for a while unless they absolutely have to sell because there are so many properties on the market at the moment, and not only are they taking a long time to sell, buyers have so many more to choose from so they have more purchasing power.
Just make sure that you have a POSITIVE CASH FLOW from your rental, and set aside some of that in a savings account for repairs.
I would advise you to speak with a financial advisor in your area so that they may advise you of options and the feasability of keeping your properties.
2006-09-28 01:49:11 · answer #2 · answered by Chellebelle78 4 · 0⤊ 0⤋
As the housing market continues to slump, you don't need to hang onto the property to get appreciation. Because properties aren't appreciating and you already have another townhouse.
Should the market eventually recover after one year, you would have put the money into another property. Now, let's compare the potential return of investment.
If your townhouse has equity of $300K and if you sell it, you can put that $300K into a CD, which is returning almost 5.75%, which is $17190.00/year.
If you rent it out, how much rent can you get? Let's assume your mortgage payment and HOA is $1200/month total. You can rent out the townhouse for $1500/month, which means you net $300/month, which is $3600/year.
If this is the case, I would sell the townhouse and reinvest the money elsewhere. You can use 1 year CD, the yield is lower, but you can get your money out for downpayment next year.
Good luck!
2006-09-28 03:26:02 · answer #3 · answered by Price is what you pay for value. 3 · 0⤊ 0⤋
Hi Sunny02,
First of all: congratulations on your marriage!
Second: where are you located? If you happen to be in the Inland Empire California, email me, because I am looking.
If not, ask around your neighboring areas to see what a property like yours would rent for.
Then go to craigslist.org, your area, and post it: 'for sale', 'for rent' and to 'lease option'.
There are also numerous sites where you can offer your townhome 'for sale by owner'.
Then, see what offers you get and take it from there.
Good luck.
2006-09-28 11:23:09 · answer #4 · answered by Anonymous · 0⤊ 0⤋
If you still owe money to the bank it's better to sell it. Otherwise rent it out let it make you money. There can also be tax benefits to using the other property as an investment property.
2006-09-28 01:46:55 · answer #5 · answered by B T 3 · 0⤊ 0⤋
It depends on the personal (total) situation of you and your husband. From first glance I would say rent it out at least until next year, but for any good advice you would need a broader financial plan. Visit www.quarantz.com to get yourself a (free) personal financial plan.
2006-09-28 02:00:55 · answer #6 · answered by Patrick L 3 · 0⤊ 0⤋
Own asset is always good. If money is needed to making development of other fixed asset then no harm.
If repayment covers by the rental return, keeping the asset is meaningful, because fixed asset always carrying great weight.
2006-09-28 01:58:35 · answer #7 · answered by Zia 3 · 0⤊ 0⤋
Rent it out. Take your time looking for good tenants by checking their background. Property is always a good investment.
2006-09-28 01:47:30 · answer #8 · answered by area51base 2 · 0⤊ 0⤋
if you have a positive cash flow keep it! 5-10 years, you will thank us!
National average equity, 3% of value, not loan size, so that can be quite good leverage.
Course we are not even looking at possible tax breaks
2006-09-28 02:57:24 · answer #9 · answered by cjkloanguy@yahoo.com 2 · 0⤊ 0⤋